Home
Model validation and applications
Historical validation of enhanced U.S. demand surge
Historical catastrophe events provide empirical evidence of demand surge and demonstrate how reconstruction timelines, labor market disruption, and construction cost inflation influence post-event losses.
Implications for catastrophe modeling
Case studies that inform the enhanced U.S. demand surge framework's design.

Overview of demand surge
Provides an overview of the demand surge frameworks supported in Verisk Synergy Studio v1.0.0.
Verisk's standard demand surge framework
The standard demand surge framework uses the industry loss for a given event, and looks that up in a table which provides demand surge factors based on the level of industry loss experienced.
Verisk's framework
Demand surge was extended to Europe in 2023 through calibration of the demand surge model using available regional economic data, enhancing its ability to capture demand surge impacts across various perils.
Verisk's enhanced U.S. demand surge framework
The enhanced U.S. demand surge framework is new for Verisk Synergy Studio v1.0.0.
Model validation and applications
- Historical validation of enhanced U.S. demand surge
  Historical catastrophe events provide empirical evidence of demand surge and demonstrate how reconstruction timelines, labor market disruption, and construction cost inflation influence post-event losses.
  - Case study: 2004 hurricane season
    Historical catastrophe events of the 2004 hurricane season provide empirical evidence of demand surge and demonstrate how reconstruction timelines, labor market disruption, and construction cost inflation influence post-event losses.
  - Implications for catastrophe modeling
    Case studies that inform the enhanced U.S. demand surge framework's design.
- Application of enhanced U.S. demand surge in the United States
- References

Implications for catastrophe modeling

Case studies that inform the enhanced U.S. demand surge framework's design.

The four case studies in question established several concepts:

Research on rebuilding timelines indicates that it typically takes approximately one year to rebuild after major hurricanes, and more than two years for more severe events such as Hurricane Katrina. Severity perils, like tropical cyclones, sustain longer rebuilding timelines than frequency perils (winter storm, inland flood). The difference in reconstruction and claim settlement timelines necessitate the need for peril-specific calibration of demand surge.
Construction labor and materials markets respond differently to a natural catastrophe. Local labor market disruption produces wage changes that are concentrated in the affected region. Construction materials market responses are mitigated by national-and global- nature of construction material supply chains. The impact to the construction material market appears as overall cost inflation over the period it takes to rebuild and settle a claim.
Pre-event construction market conditions are a critical component to accurately capturing the real-time magnitude of post-event construction cost inflation, while historical construction cost inflation averages can be used to estimate potential demand surge over longer terms. User control over inflation assumptions allows the model to support a wide range of analytical and scenario-testing workflows, including sensitivity testing and current-market adjustments.