Patterson notes, however, that the model has a significant impact in Texas and along the Gulf Coast, where insureds and producers have not paid as much attention to the models as have those in Florida. “I think Texas and the Gulf Coast is where it's really having an impact right now, because it's kind of new to them,” she says.

Patterson says she recently came from a meeting with a Texas broker who told her, “I don't want to talk about [the new model] again!” She says, “I felt sorry, but that's the reality of where we are right now.”

The model, RMS Version 11.0, makes adjustments to the impact of wind during a hurricane, possibly putting more risk inland as the modeler looks at the interaction of wind and the surface of the sea. The new model is based on new data derived from the 2004 and 2005 hurricane seasons as well as Hurricane Ike in 2008.

Chris Treanor, president of Preferred Concepts, a national program administrator and specialty broker, observes that the market is “less spooked” now by the new model than when it was first released.

“Six months ago, I would have said it would have a huge impact, but that hasn't played out,” Treanor says. “The industry has not blindly accepted it.”

While the market is reacting to the model by reevaluating (and possibility shedding) exposure, this has not yet led to an influx of new business to the specialty arena, he adds—although he noted that could change during the 2012 first quarter, when new treaties are signed.

Paterson believes Beazley has a good understanding of the changes in the model, and says the changes agree with Beazley's experiences from Hurricane Ike. “Our personal experience during that cat echoes some of the changes RMS is making as far as extending the wind fields further inland,” she says.

Explaining Beazley's response to the model change, Patterson says, “We have adopted RMS Version 11.0. I know there are some carriers who are using blended models, or trying to, in some ways, temper the impact.

“But we buy a lot of catastrophe reinsurance, and we're going to pay for our reinsurance based on Version 11 results. So I don't think we have any choice but to adopt Version 11. That's going to dictate reinsurance availability and reinsurance pricing.”

Regarding the weight insurers place on this model and others, she says, “I think it varies considerably from company-to-company. Some companies are very model-driven in their risk selection and pricing. Others take a different approach.” Patterson adds that Beazley looks at each account individually, factoring in how the account models and how it impacts the company's portfolio already in force.