Posts Tagged ‘Models’



May 29th, 2018

Terrorism Risk Modeling Poses Challenges

Posted at 1:00 AM ET

terrorism-rep-connections-banner-2Terrorism risk modeling methods have been continually updated since leading modeling companies AIR Worldwide and Risk Management Solutions released their first terrorism models in 2002. Quantifying the economic, insured and human losses from terrorist attacks poses major challenges for insurers, reinsurers and alternative capacity providers.

Marsh’s 2018 Terrorism Risk Insurance Report, produced with support from Guy Carpenter, explores the state of the terrorism insurance marketplace, presenting data on purchasing and pricing trends.

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May 17th, 2018

Building for Resilience: How to Avoid a Catastrophe Model Failure

Posted at 1:00 AM ET

Here we bring together our recent multi-part series on model resilience by Guy Carpenter’s Global Chief Catastrophe Modeler, Imelda Powers.

Since commercial catastrophe (CAT) models were first introduced in the 1980s, they have evolved as new scientific discoveries and claims insights emerged. Despite the sophisticated nature of each new generation of CAT models, occasionally a model misses a significant loss driver for a particular peril. This occurs when a previously hidden attribute reveals itself through unprecedented intensity. Lessons from such surprises stimulate model improvements as our understanding of the physics of the peril and its damage potential, increase. Through this process, models mature over time.

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April 30th, 2018

Guy Carpenter Licenses First-of-its-Kind Cyber Risk Modeling Platform from CyberCube Following Strategic Alliance

Posted at 9:00 AM ET

Guy Carpenter & Company today announced that its two year strategic relationship with CyberCube Analytics, formerly part of Symantec Corporation, has produced the industry’s first cyber risk modeling platform with an inside-out view of cyber risk exposure.

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April 26th, 2018

Building for Resilience: How to Avoid a Catastrophe Model Failure: Part IV

Posted at 1:00 AM ET

Imelda Powers, Global Chief Catastrophe Modeler

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Valuation Assumptions

There is no database of agreed property, contents or business interruption valuations among vendors or insurers.  Any user’s particular valuation may come from databases of property prices, or rebuild values from claims adjusters and building surveyors. If the model’s assumed valuations are under- or over-estimated, then the damage function may over- or under-compensate in order to balance to historical industry event losses during the model-building process. Consequently, it is important that the user adjust the damage module to reconcile these differences.

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April 25th, 2018

Building for Resilience: How to Avoid a Catastrophe Model Failure: Part III

Posted at 1:00 AM ET

Imelda Powers, Global Chief Catastrophe Modeler

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If resources permit, an insurer may carry out additional, micro level model suitability analyses - including a review of model hazards and vulnerabilities using the latest scientific literature and engineering studies. Guy Carpenter’s Model Suitability Analysis (MSA)® framework is designed to guide users through such an analysis.

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April 24th, 2018

Building for Resilience: How to Avoid a Catastrophe Model Failure: Part II

Posted at 1:00 AM ET

Imelda Powers, Global Chief Catastrophe Modeler

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Model Suitability Analysis

There is a repertoire of tests, at both the macro and micro levels, to evaluate the merits of a CAT model.  Regardless of resources, insurers should analyze how each test’s result informs their view of risk. Here we review the macro level.

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April 23rd, 2018

Building for Resilience: How to Avoid a Catastrophe Model Failure: Part I

Posted at 1:00 AM ET

Imelda Powers, Global Chief Catastrophe Modeler

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Since commercial catastrophe (CAT) models were first introduced in the 1980s, they have evolved as new scientific discoveries and claims insights emerged. Despite the sophisticated nature of each new generation of CAT models, occasionally a model misses a significant loss driver for a particular peril. This occurs when a previously hidden attribute reveals itself through unprecedented intensity. Lessons from such surprises stimulate model improvements as our understanding of the physics of the peril and its damage potential, increase. Through this process, models mature over time.

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February 1st, 2018

Cyber Risk in an Interconnected World; Part II

Posted at 1:00 AM ET

platt-jeremyJeremy S. Platt, Managing Director and U.S. Cyber Specialty Practice Leader

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The new year will also offer cyber carriers the chance to seize opportunities created by innovative technologies to adapt lessons from other lines of business. Today, risk management of a cyber event reflects characteristics of pandemic containment. The medical community has developed clearly defined metrics and rigorous procedures for public and private stakeholders to reduce the impact of an outbreak. Similarly, the date of occurrence, duration, common source connection, frequency and severity are significant factors in adjusting cyber (re)insurance claims, and often depend on some level of collaboration with public entities. But as discussed above, a common currency to analyze and discuss cyber exposures is still being perfected. Quantification of cyber losses is also complicated by “silent” all-risk policies where cyber is the peril, but no cyber exclusions exist.

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January 15th, 2018

Interoperability: A Case For Open Source

Posted at 1:00 AM ET

peter-hearn-2-smPeter Hearn, President & CEO

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  • Industry-wide call for increased transparency in cat modeling
  • Interoperability facilitates collaboration of multiple data sources
  • Open source models allow insurers to develop own view of risk

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