Integrated demand surge calculation

The integrated demand surge calculation combines labor market disruption hazard and post-event construction cost inflation components to estimate the total demand surge impact for each model year.

Together, they produce an integrated view of demand surge that reflects both labor market pressures and overall construction cost inflation arising from delayed reconstruction. The magnitude of demand surge varies by peril, geography, and loss amount.

Demand surge is calculated on a model-year basis. For each year, demand surge is applied to every event in the model year. For labor disruption, the largest loss‑driving event in each state (as measured by damage density) determines the magnitude of labor market disruption applied for that year. Post-event construction cost inflation is applied across all affected states and is scaled based on estimated rebuilding and claim settlement durations.

Each component is calculated at the state level, allowing the framework to capture differences between more vulnerable and less vulnerable areas. User control over inflation assumptions allows the framework to support a wide range of analytical and scenario-testing workflows, including sensitivity testing and current-market adjustments.