Model a Florida hurricane

Steps to model a Florida hurricane in Touchstone Re.

A Florida Hurricane Catastrophe Fund (FHCF) is a tax-exempt state trust fund that provides additional reinsurance for insurers writing residential risk. This can be modeled in Touchstone Re using an inuring relationship which allows losses outside of a layer (below the retention and above the limit) to feed into other programs and layers. Below is one example of how to model an FHCF structure which applies to residential exposure in Florida for Tropical Cyclone. Typically co-insurance is applied at 45 %, 75% or 90% with 0 reinstatements.

Procedure

  1. Open your company, create a program and name it FHCF using Companies > [Company] > Programs .
  2. In Program Details > Layers:
    1. Set Occurrence Limit to 35,000.
    2. Set Occurrence Retention to 10,000.
    3. Set Applies to Areas to Florida.
    4. Enable only the Wind peril.
  3. In Program Details > Program Options:
    1. Select a company loss set.
    2. Set Program Coverage Rate to 100% for residential and for all others to 0%.
  4. Create a second program and name it Main.
  5. In Program Details > Layers for Layer 1:
    1. Set Occurrence Limit to 25,000.
    2. Set Occurrence Retention to 10,000.
  6. In Program Details > Layers create Layer 2, then:
    1. Set Occurrence Limit to 45,000.
    2. Set Occurrence Retention to 35,000.
  7. In the Relationships tab:
    1. Drag-and-drop the FHCF program over the Main program.
    2. Define the relationship as Inuring.
  8. Click to save your settings.
  9. To run an analysis on the Main program and view results net of FHCF, open the Main program and click .
  10. To run an analysis on the FHCF program, open the FHCF program and click .