A Frequency Based Model for Excess Wind in Property Ratemaking

In some geographic areas the most significant cause of variation in total dollar losses are fortuitous, non-hurricane storms. Many of the models developed to address the issue of such excess wind losses use dollar loss data only. The traditional models may muddy the distinction between large loss procedures and excess wind models, particularly in territorial analysis. Additionally, as new models are developed which address the hurricane-type risks only, overlap between the hurricane and non-hurricane losses in the traditional procedure degrades the utility of the historical database. A frequency based model for excess wind is proposed. A frequency based model has the benefit of both providing an appropriate load for non-hurricane excess wind, and making the company’s internal property data more suitable for trend analysis.