Cat modeler: exposure data at fault, not models.Catastrophe Catastrophe, from the Greek Καταστροφή (katastrephein), literally means "to turn" (strephein) "downwards" (kata-). modeler AIR Worldwide Corp. has released a report that finds the quality and completeness of data on insured properties to be lacking, especially for commercial policies. The report comes amid concerns over the accuracy and reliability of cat models in the wake of Hurricane Katrina  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. . AIR, which reviewed exposure data from companies representing more than 50% of the U.S. property markets, argues that the problem isn't the models but the data that insurers feed into them. In particular, property replacement value--a parameter (1) Any value passed to a program by the user or by another program in order to customize the program for a particular purpose. A parameter may be anything; for example, a file name, a coordinate, a range of values, a money amount or a code of some kind. with considerable impact on catastrophe loss estimates--is of questionable accuracy for most of the companies analyzed an·a·lyze tr.v. an·a·lyzed, an·a·lyz·ing, an·a·lyz·es 1. To examine methodically by separating into parts and studying their interrelations. 2. Chemistry To make a chemical analysis of. 3. , according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the report, which also found data on construction type, occupancy class and location to be inadequate. Nine out of 10 commercial properties analyzed by AIR had replacement values, which is the full cost to replace a building in the event of total loss, less than the amount estimated using a standard engineering-based cost-estimation process, the report stated. To obtain accurate catastrophe loss estimates, coverage limits shouldn't be used as a proxy for the replacement value, the report warned. More than 50% of companies analyzed lacked construction and/or occupancy information for more than a third of their policies. In some cases, the same information was missing for more than 75% of commercial properties. Catastrophe losses much larger than those caused by Hurricane Katrina will happen in the future, the report states. AIR estimates that an intense hurricane striking a major metropolitan area could cause insured losses exceeding $150 billion. Recently, Risk Management Solutions Inc., another cat modeler, also issued a report that faulted insurers for using "outdated out·dat·ed adj. Out-of-date; old-fashioned. outdated Adjective old-fashioned or obsolete Adj. 1. , incomplete, poorly resolved and miscoded" exposure data. Katrina alone is estimated to have caused as much as $60 billion in insured losses, surpassing 1992's Hurricane Andrew This article is about the 1992 hurricane; there was also a Tropical Storm Andrew during the 1986 Atlantic hurricane season. Hurricane Andrew is the second-most-destructive hurricane in U.S. history, and the last of three Category 5 hurricanes that made U.S. as the costliest hurricane on record. Andrew caused about $20 billion in losses, when adjusted for inflation. |
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