Karen Clark is president and CEO of Boston-based Karen Clark & Co., which she co-founded in 2007 to help insurers, reinsurers and others companies more effectively manage catastrophe risk by using models and other information. Recently, she spoke with Business Insurance Associate Editor Matthew Lerner about developments reshaping the modeling sector. Edited excerpts follow.

Q: What is the most important innovation in the modeling space in the past 12 months?

A: There’s no question the most important innovation by far is this new development of open loss modeling platforms. Nothing else comes close in terms of importance to the space. This is going to change the way companies manage catastrophe risk. It’s by far the most important innovation because what it allows clients to do is actually build their own bespoke models, and that is a paradigm shift.

Q: What is the advantage of open model platforms such as RiskInsight?

A: The key advantage is clients’ control over important risk management decisions and the ability to better leverage scientific knowledge and expertise. For example, RiskInsight, gives direct access to the model vulnerability curves so clients can analyze their own detailed claims information to fine-tune the curves to better reflect their specialized books of business. Because RiskInsight comes with built-in modules for projecting event intensities and frequencies, our clients can analyze the effects of new scientific research, as soon as it becomes available. Open platforms give them control over the assumptions in the model.

Q: Do you see any increase in demand for or activity among modelers?

A: There is growing demand from all sectors — insurers, reinsurers, even insurance-linked securities investors. They all want three things: models that are fully transparent; model assumptions that are easily accessible and customizable; and more efficient and cost-effective modeling platforms. So that is the genesis for these open platforms — this is what the industry is asking for. They want to be able to leverage their own big data to generate proprietary knowledge they can use to competitive advantage.

Q: Looking forward, what do you think will be the major trend(s) over the next 12 months?

A: The trend is for the scientific and engineering knowledge to become more decentralized. As companies adopt these open platforms and start to build their own bespoke models, they are going to want to access more scientific and engineering experts. It’s already starting to happen.