May 12th, 2009

Casualty Cat Part VI: Enterprise Protection, Capital Optimization

Posted at 1:00 AM ET

metropoulos_emil_bioEmil Metropoulos, Senior Vice President

Casualty risk is changing. Single risks have become the portals by which catastrophes can enter a portfolio. The action is swift, and the consequences severe. Warnings are few … if there are any at all. The only protection possible is to be proactive: casualty writers must plan now for events that cannot be anticipated. While this has been close to impossible in the past, the application of a well-planned Enterprise Risk Management (ERM) framework supported by a cutting-edge casualty catastrophe model can provide the insights needed to make informed decisions about the capital a carrier puts at risk.

Currently, ERM is primarily used to help determine capital requirements, but it has even wider applications. ERM provides the procedural and analytical structure necessary to determine the implications of covering new risks, shifting portfolio tactics or pursuing new types of business. Casualty catastrophe models, such as Casualty Cat, enable the discipline required to make ERM frameworks effective. Together, they advance the modeling of casualty risks considerably, enabling a holistic view of the casualty portfolio and empowering carriers to fill the gaps in their risk management plans. The tools of the trade are evolving alongside the changing nature of the casualty threats that carriers face whether within a portfolio, among lines of business, or among business units in a multinational group.

Countless integrated casualty risks may be buried in (re)insurer portfolios. Many are unknown, but they do not have to be. Maturing processes and deeper insights are pulling casualty catastrophe risks to the foreground. No longer concealed, the threat they pose is reduced, and casualty writers can make decisions about capital that reflect the full spectrum of risks they cover.

Casualty Cat Part I: Casualty Catastrophe Risk Modeling >>

Casualty Cat Part II: Tracking Integrated, Intricate Risks >>

Casualty Cat Part III: Enterprise-Wide Evaluation >>

Casualty Cat Part IV: Casualty Cat Exposes Exposure >>

Casualty Cat Part V: Case Study >>

This is the first in a five-part series. To have the next installment delivered directly to your inbox, register for e-mail updates.

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