FITS™ Scores & Precision Rating™
Groundbreaking. Precise. Critical.
Differentiating flood risk precisely and consistently at the structure level is the mission of Stream Methods. In the company's search for answers to questions such as "what is the true and full risk of this building" and "why do I pay $20 more for insurance than my neighbor across the street," it has made several theoretical, mathematical, and practical breakthroughs.
In layman's language, Flood Impacting Threshold™ (FIT™) is an event when excessive water reaches a location on terrain or the foot of a building, but inundation or damage has not yet occurred. If the water rises a little bit more, inundation occurs and damage may follow. This threshold's existence is a physical property of a location or a manmade structure, independent of human judgement. It is also unique from location to location and building to building, assuming no two are exactly the same. FIT™ is a critical and driving factor for risk rating.
FIT™ events can be modeled and their characteristics determined. Some FIT™ characteristics are good candidates for a precise, simple, and meaningful "flood risk score" that is consistently and globally applicable. Stream Methods' FITS™ scores, for example, were launched in 2016 to provide on-demand data services of key FIT™ characteristics including FIT™ Frequency and FIT™ Elevation. A building at a FITS™ frequency of 1.3% is at higher risk than another of 1.2%. Similarly, a building with a 53-year FIT™ return period is at higher risk than one of 54-year. For risk communication purposes, FITS™ scores can be transformed in various ways, e.g. by applying a multiplier. If one house's FITS™ score is 102(1.02% x 10000) and the other house is 99 (0.99% x 10000,) one would expect the first house carrying a higher insurance premium. FITS™ scores are precisely modeled by a massive but consistent engineering workflow and can be directly utilized to generate other products such as premium ratings.
For various purposes, FITS™ scores can be further transformed into various formats including graphical. Launched in 2017, InstaScore™ was designed to be an easy-to-understand indicator of flood risk. InstaScores™ are transformed and grouped values of precise FITS™ scores fitting on an arbitrary scale of 5, 10, or others. They can be even further transformed and represented by a color scale such as green-yellow-orange-red, with green representing lower risk.
The concept of Flood Impacting Threshold™ lays the theoretical foundation for precisely differentiating risk. PrecisionRating™ calculates risk based on FIT™ , the "lower boundary" critical to rating risk precisely and fully. It calculates the full risk by counting the full range between this "lower bound" and a chosen "upper bound" event. The result is often significantly, even dramatically, different from rates calculated based on other rating methods because those systematically under- or over-rate full risk.
Flood Impacting Threshold™, FITS™ scores, InstaScore™, and PrecisionRating™ break out from the conventional paradigms such as the binary "in or out," "single frequency" (e.g. 100-year only,) or fixed-frequency (e.g. 50-100-200-500 years.) They precisely and consistently reflect the progressive nature of flood risk globally. Rather than describing a building is IN a 100-year floodplain with BFE 256 feet, for instance, now we say the building is AT / ON the line of 79-year FITS™ frequency with FITS™ elevation 254feet. The above mentioned concepts, products, and technologies are mature and available on massive scales. They are new and powerful tools for better accomplishing our mission: differentiate and communicate risk precisely, consistently, and at the building level.
(The above is to be presented at 2019 Annual Conference of Association of State Floodplain Managers.)