A Scalable and Automatic Validation Process for Florida Public Hurricane Loss Model (Invited Paper)
The Florida Public Hurricane Loss Model (FPHLM) is a public catastrophe model that integrates and regulates all key components, such as meteorology, engineering, and actuarial components, by following a certain workflow in the execution phase. The validation phase governed by an Automatic Data Validation (ADV) program simulates each modeled execution component with a large number of historical insurance data of specific hurricane events. The differences between the actual losses and the modeled losses of the insurance portfolios are evaluated to validate the model. The original validation process is time-consuming and error-prone when handling large data sets. This paper presents how the automated computer program efficiently and correctly incorporates the key components and produces useful reports for the validation purposes. By considering sixty-six combinations (i.e., the combination of one company and one hurricane) of the claim data, the FPHLM model adopts the largest set of portfolios comparing to the other four private models, which makes the validation process more challenging.