Research/current
Florida Public Hurricane Loss Model and catastrophe bond pricing
Catastrophe-bond pricing design built on FPHLM, the public hurricane catastrophe model based at FIU.
The Florida Public Hurricane Loss Model (FPHLM) is a publicly developed, state-certified hurricane catastrophe model led by Florida International University and created by a multidisciplinary, multi-university team. Its wind-hazard, engineering-vulnerability, and actuarial components estimate insured losses and probable maximum losses for personal and commercial residential properties. The State of Florida uses FPHLM as a benchmark for evaluating insurers’ windstorm risk estimates and reviewing residential property insurance rates.
Our lab builds on FPHLM loss estimates to study catastrophe-bond structuring and pricing. The project examines how a transparent hurricane-loss distribution can inform the loss metric, trigger, attachment point, payout structure, and risk premium of a catastrophe bond. The specific contract design is currently under development.