Catastrophe Risk Management Technology
  • What Are Cat Risk Models?
  • Who Use Cat Risk Models?
  • Why Cat Risk Modelling?

    Insurance industry is well experience and equipped to manage and predict the losses associated with claims from more frequent events such as automobile accidents and life coverage. For such events there are usually good histories of claims which provide facilities for reliable estimation of severity and frequency of potential losses, using actuarial methods. However, such actuarial methods are of no or little use for assessment of potential losses from natural catastrophes, due to rare frequency of such events as well as high variation of natural catastrophe characteristics and also constant changes in the built environment conditions. Other justification for using cat risk models include:

    • Catastrophe losses with Low Frequency / High Severity
    • Infrequent events therefore, scarcity of historical losses
    • Inadequate standard actuarial Loss Estimation techniques
    • Constantly changing landscape of insured properties
    • High uncertainties in scientific and engineering data
    • Flexible and sophisticated models to gauge the Risk Potential of a diverse range of Company's and Portfolios