First American Spatial Solutions Announces Release of U.S. Flood Catastrophe Model
—Expands Suite of Advanced Flood Risk Solutions—
May 12, 2008, AUSTIN, Texas
First American Spatial Solutions, a member of The First American Corporation (NYSE: FAF) family of companies and a leader in spatial and natural hazard risk solutions, announced today the launch of its new U.S. Flood Catastrophe Model (Flood Model), a key component of its new suite of Advanced Flood Risk Solutions, which includes geospatial analytics, basic flood data, flood risk scoring and near real-time monitoring of actual flood conditions.
The Flood Model is a sophisticated risk management tool that allows insurance companies to measure their financial exposure to floods at the portfolio, policy and property level. One unique feature of the Flood Model is that it takes into account riverine and coastal flooding hazards throughout the continental U.S., allowing insurers to utilize a single solution for evaluating flood risk on their entire portfolio. Based on proven hydraulic science and actual historical flooding events, the Flood Model has been validated against hundreds of thousands of claims and reports probable maximum loss to average annual loss and key return period losses.
Each product in First American’s suite of Advanced Flood Risk Solutions, including the Flood Model, augments a distinct function within the property and casualty insurance process, including pre-bind risk identification, underwriting, portfolio management, risk transfer and claims management. These products can be used individually or can be combined to form customized solutions that enable every segment of the insurance industry to more profitably manage flood exposure.
“Several years ago, First American embarked on the process of taking expertise developed for our traditional markets and expanding those capabilities to drive solutions for new industries,” said Frank V. McMahon, vice chairman of The First American Corporation. “Our advanced Flood Risk Solutions combine competencies in location technologies and flood risk management with key acquisitions and partnerships. The result is a complete suite of products that can be used by insurers to better estimate risk and take advantage of new market opportunities.”
Flooding is the most pervasive and destructive of all natural perils and it threatens properties throughout the nation and is an underrealized market opportunity for the insurance industry. Many insurers and reinsurers choose not to proactively underwrite this specific peril because they lack the tools to accurately measure and manage flood risk in the U.S. Recognizing a particular need in the commercial, excess and surplus and reinsurance markets, First American partnered exclusively with Swiss Re, the creator of the Flood Model, to bring the model to market so that insurers would have the ability to quantify and manage flood risk to an extent never before possible.
“First American’s geospatial and flood risk expertise makes it the best partner to offer the Flood Model to the insurance industry,” said Andy Castaldi, senior vice president of Swiss Re. “First American will continue to enhance the Flood Model and leverage the company’s position as a leader in flood risk information to drive product adoption.”
First American has provided reliable flood risk data to lenders, insurers, government agencies and other entities for more than 20 years. The company’s Advanced Flood Risk Solutions draw on these extensive resources and experience to deliver a suite of products designed specifically to meet the needs of the insurance industry. For more information visit www.firstam.com/advancedflood or call 1-877-888-7808.
About First American
The First American Corporation (NYSE: FAF) is a FORTUNE 500® company that traces its history to 1889. With revenues of approximately $8.2 billion in 2007, it is America’s largest provider of business information. First American combines advanced analytics with its vast data resources to supply businesses and consumers with valuable information products to support the major economic events of people’s lives, such as getting a job, renting an apartment, buying a car or house, securing a mortgage and opening or buying a business. The First American Family of Companies, many of which command leading market share positions in their respective industries, operate within five primary business segments, including: Title Insurance and Services, Specialty Insurance, Information and Outsourcing Solutions, Data and Analytic Solutions, and Risk Mitigation and Business Solutions. More information about the company and an archive of its press releases can be found at www.firstam.com.