A panel of experts has submitted its in-depth analysis of the insurance industry’s “black box” catastrophe models and how they affect South Carolina’s home insurance rates. But it’s unclear how much the public will learn from their report.

The series

Visit postandcourier.com/storm-of-money for The Post and Courier’s report on how state regulators fail to level the playing field for consumers while insurers rake in record profits. Examples:

During the past decade, average home insurance bills statewide have risen 73 percent. But this increase masks much larger rate hikes on the coast.

Some homeowners in Charleston, Beaufort and other coastal counties have seen their premiums triple, and now pay more for home insurance than property taxes.

What’s more, South Carolinians pay on average about one-quarter more for their homeowners’ insurance than property owners in North Carolina and Georgia.

Catastrophe models have a huge impact on what homeowners pay to insure their homes, yet regulators with the state Department of Insurance knew little about their calculations and whether they were fair, a Post and Courier series, “Storm of Money,” revealed last year.

In the wake of the series, the Insurance Department hired experts to look under the hood of these models. The panel included a nationally recognized actuary, a meteorologist and an engineer. They submitted the report a week ago, and insurance officials were reviewing the results this week, said Ann Roberson, executive assistant with the Insurance Department. She said staff and panel members are working to address several questions about the findings, and that this process will take about a month. Once the report is done, the department will release “portions subject to disclosure under South Carolina law.”

Martin Simons, the actuary who worked on the report, declined to comment about the panel’s findings, saying that modeling companies provided them information only if the panel members signed confidentiality agreements. He said the report includes a summary of what the panel did.

Daryl Ferguson, a retired executive in Beaufort who spearheaded an insurance reform campaign, said the department needs to err on the side of full disclosure. “If there’s confidential information, they can block it out,” he said.

When other states looked at models, they found problems, he added. “But South Carolina had not done that until last fall because of The Post and Courier (series). We expect that some rates are out of line because the profits of the insurance industry in South Carolina are more than three times the national average.”

The newspaper’s series found that South Carolina has among the highest property insurance rates in the nation, especially when it comes to high-value homes.

Yet, because of the concave shape of the coast and other factors, the state’s risk of being hit by a catastrophic hurricane is much less than other parts of the country.

Catastrophe models play a major role in how insurers calculate what you pay in premiums. Catastrophe modeling companies plug historical information about hurricane strikes, property locations and other factors into complex computer programs that the industry sometimes calls “black boxes.”

These programs then spit out numbers that help insurance companies assess an area’s risk of being hit by hurricanes and other catastrophes.

Insurers began using catastrophe models in the early 1990s after Hurricane Andrew caused much more damage in Florida than insurance companies had predicted. In recent years, these models have been predicting much higher potential losses, and insurance companies have been using this information to justify higher rate increases.

Insurers say the risk models helped build more stability into the market, but critics say some of these models aren’t working, and that insurers are using faulty data and assumptions built into the models to boost profits. An architect of one of the first models, Karen Clark, has said recent models overestimated catastrophe losses by $53 billion.

Studies show that storms with hurricane-force winds come within 50 miles of South Carolina once every five years on average but that the likelihood of a catastrophic hurricane affecting a specific place on the coast is much lower.

For instance, an analysis last year for the newspaper by WindRisk Tech LLC, a company founded by noted meteorologist Kerry Emanuel of the Massachusetts Institute of Technology, showed that a catastrophic hurricane, one with at least 115 mph winds, would on average affect a spot in Charleston once every 370 years.