Insurers need to improve catastrophe models: Bank of England

The Bank of England said that insurers need to improve the models they use to calculate potential risks from natural catastrophes, Reuters reported. Scenarios to test risks, such as flooding following hurricanes or tsunamis after earthquakes, showed "few insurers go beyond a simple loading to reflect weaknesses," the bank said. "Boards are encouraged to understand what the limitations are with the catastrophe modeling, and their inherent uncertainty when applicable, especially for their key perils."

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