What Is Catastrophe Modeling

There are four basic modules to catastrophe modeling.

Black cat ultimate. Catastrophe modeling is a risk management tool that uses computer technology to help insurers and reinsurers as well as business and government agencies better assess the potential losses caused by natural and man made catastrophes. Seminars conducted under the auspices of the cas are designed solely to. How rms is raising the bar in catastrophe modeling.

Catastrophe modeling uses data and analysis to create predictive models of risk and potential damage from natural disasters extreme weather events terrorism and pandemics. Thousands of possible event scenarios are simulated based on realistic parameters and historical. Event hazard or intensity.

Chapter 1 the essentials 6 the review a guide to catastrophe modelling 2008 catastrophe modelling fundamentals. Today catastrophe models are prevalent throughout the insurance industry assisting reinsurers and other stakeholders in managing their risk from both natural perils and more recently man made catastrophes across the globe. Catastrophe model output is a critical capital modeling input to determine optimal capital solutions.

Catastrophe modeling also known as cat modeling is the process of using computer assisted calculations to estimate the losses that may be sustained due to an occurrence of catastrophic events such as earthquakes hurricanes terrorism and pandemics. The rating agencies use modeling to assess catastrophe risk as a primary threat to an insurers solvency. As of september 2012 all us property carriers have implemented the new version of rms 11 assuming they use.

Catastrophe modeling is the practice of using computer programs to mathematically represent the physical characteristics of natural catastrophes terrorism pandemics extreme casualty events and cyber incidents. These models are referenced to estimate financial impact from catastrophic events. Fundamentals of catastrophe modeling cas ratemaking product management seminar catastrophe modeling workshop march 15 2010 2 the casualty actuarial society is committed to adhering strictly to the letter and spirit of the antitrust laws.

They run the models on an insurers aggregate exposure which depending upon how exposed an insurer is may impact its rating. In the case of rare but severe events historical loss information has proven unreliable in assessing future loss potential. The first stage of catastrophe modeling begins with the generation of a stochastic event set which is a database of scenario events.