Tools help insurers examine uncertainties in modeling catastrophes
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Impact Forecasting, the catastrophe modeling arm of London-based reinsurance intermediary Aon Benfield, said Tuesday that tools have been added to help insurers and reinsurers evaluate loss estimates from catastrophe models.
The tool suite has been integrated with Elements 8, the latest version of Impact Forecasting's loss calculation platform and is intended to help users quantify uncertainties in catastrophe models across all perils and territories.
The company said disasters such as the 2012 flooding in Thailand the 2011 earthquake and tsunami in Japan highlighted the need for model users to understand the relative importance of uncertainties across all model components.
“The entire process of catastrophe modeling comprises various uncertainties,” Adam Podlaha, international head of Impact Forecasting, said in a statement. “These are inherently present in the different stages of the process — from the decisions taken during the model development phase and in the preparation of portfolio data, to the way the model is used by the analyst or in the interpretation of the results.”
Accordingly, the tools give users ways to graphically visualize the size of uncertainty for different loss perspectives.
“These new tools enable insurers and reinsurers to visualize the range of uncertainties and make business decisions based on their individual risk appetites,” Mr. Podlaha said.
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