Part 2 of 4

Updating Swiss Re’s hurricane model

5 minute read
Updatng our TCNA model Image of a palm tree blown in a storm
In 2022, Swiss Re released a major update to its Tropical Cyclone North America (TCNA) model. The new model includes improved cyclone tracks, wind field modelling, urbanisation patterns, secondary perils such as storm surge and flood, and revised climate and claims trends.

Erdem Karaca, Head of Catastrophe Perils Americas, shares his insights.

What is Swiss Re’s TCNA model?

Simply put, the TCNA model is our way of understanding a particular location’s exposure to hurricanes in the North Atlantic. It is also used to understand this location’s contribution to Swiss Re’s overall North Atlantic hurricane risk. With this knowledge, we can put a dollar value on tropical cyclone risks across that region.

How does it work?

We use a scientific, data-driven approach for our models. To estimate the current intensity and frequency of tropical cyclones, their wind speeds at landfall and beyond, as well as the impact of accompanying flooding, we use data on tropical cyclone tracks, flood zones, surge inundation and detailed insured loss experience, to name a few factors.

We also make sure we include the most recent developments from the broader risk landscape – such as the latest climate change insights, as well as trends such as urbanisation, demographics and economic changes. We then calculate the interaction of these factors across the assets we will insure. This way, we can develop a deep understanding of the economic impact of a tropical cyclone on a given location, or on a specific risk. 

Screenshot from Swiss Re's TCNA solution
Model of surge/wind losses along the Gulf Coast
Screenshot of Swiss Re's TCNA platform modelling a storm
Model of extreme rainfall events in the Northeast

Why is this important?

Having a strong model means we have confidence in assessing our exposure to hurricanes, price new business and set the amount of capital we need to stay financially strong in this type of business.

What is special about this update?

The new model has two pieces of work that we are very proud of. The first is the enhanced way we look into secondary perils – particularly flood and storm surge patterns. In recent years, we have seen that these factors play an increasingly significant role for economic and insured losses. However, they come with exceptional challenges in modelling. Scientific and computational capabilities have improved considerably in recent years, allowing us to more confidently include these aspects in our risk view. 

We have also developed a much more holistic view of the risk landscape. So, for example, the model can incorporate the way cities have evolved, factoring in aspects such as the ability of urban areas to absorb water when a flood occurs. We also explicitly consider social and claims inflation effects that were observed in recent years.

Who will benefit from this update?

Our clients can benefit from robust risk assessment, which is the backbone of stable and cost-efficient reinsurance support. It also shows our investors and rating agencies that we can properly assess hurricane risk and write better quality business based on the latest scientific and engineering knowledge. It is especially important for our regulators, who need to understand how much risk we have, and how much capital we need to stay financially strong.

Erdem Karaca (1)


Erdem Karaca (1)

Erdem Karaca

Head Catastrophe Perils, Americas

The Catastrophe Perils team is the guardian of nearly 200 proprietary natural catastrophe models. This includes the all-important TCNA model, which covers US hurricanes.

Feature Stories

Explore our Business Report 2022

Financial strength

P&C Re 10-year combined ratio on natural catastrophe business, 2013–2022


P&C Re’s achieved price increases in 1 January 2023 renewals


P&C Re’s portfolio growth in natural catastrophe business at 1 January 2023 renewals


Swiss Re has carefully steered its natural catastrophe business and for P&C Re, achieving an average 10-year combined ratio of 77%. As the global property reinsurance market moved into a “hard market” in 2022, Swiss Re achieved strong price increases and grew its business. 

Building resilience 

Global economic losses from natural catastrophes in 2022 (USD)


Global insured losses from natural catastrophe losses in 2022 (USD)


Estimated global natural catastrophe reinsurance premiums in 2022 (USD)


In 2022 alone, global economic losses from natural catastrophes soared to USD 275 billion. The insurance industry provided USD 125 billion in claims payments. However, the protection gap remained well over 50% of all losses.

Estimated insurance industry claims for Hurricane Ian (USD)


Swiss Re claims for Hurricane Ian (USD)


Natural catastrophe claims in (P&C Re) for 2022 (USD)


Hurricane Ian is estimated to have cost the insurance industry USD 50–65 billion, making it the second-costliest hurricane on record. Swiss Re expects to provide USD 1.3 billion in claims to hundreds of clients for this event.  

Research and development

Swiss Re's proprietary natural catastrophe models Covering 90% of global insured exposures


Global insured exposures covered by Swiss Re's models


Scientists employed by Swiss Re's natural catastrophe modelling team



For its natural catastrophe business, Swiss Re currently employs more than 50 dedicated scientists who maintain around 200 natural catastrophe models. These models provide insights into over 90% of the world’s insured exposures.