Karen Clark & Company Selected by the National Association of Insurance Commissioners (NAIC) to Consult on Catastrophe Models.
SPA Risk LLC to Report on Earthquake Loss Modeling
BOSTON -- Karen Clark & Company, independent experts in catastrophe risk, catastrophe models, and catastrophe risk management, today announced it has been selected by the National Association of Insurance Commissioners (NAIC) as the lead consultant in developing a recommendation on the scope, timeline, and potential costs of building a national catastrophe multi-peril model for personal lines.
The NAIC retained Karen Clark & Company to conduct the study and produce the report which will include three sections - hurricane loss modeling, earthquake loss modeling and general modeling. SPA Risk LLC, a consulting firm with special expertise and experience in natural hazards model development, risk assessment, and risk mitigation, has also been retained by the NAIC to develop the earthquake loss modeling section of the report.
"Given the importance of catastrophe models in assessing insurance company exposure to financial loss, the NAIC requires a thorough expert analysis of various alternatives with respect to these models," said Karen Clark, President and CEO, Karen Clark & Company. "We are thrilled to have been selected by this prestigious organization, and to lend our expertise to this ambitious effort."
Karen Clark & Company will determine the feasibility and cost estimates for creating a hurricane model to estimate residential losses nationwide, down to at least the ZIP code level, on an average annual loss basis, and for developing scenario catastrophes and aggregate losses for various return periods. The firm will determine whether a national hurricane model can be leveraged or adapted from existing models, such as the Florida Public Hurricane Loss Model and the HAZUS model. SPA Risk LLC will conduct a similar assessment for an earthquake model. Karen Clark & Company will also provide general expertise to regulators on the feasibility and costs of building a national catastrophe model, and guidance on proper evaluation of private catastrophe models.
"The increased use of catastrophe models creates a new challenge for insurance regulators, since the models play a significant role in a company's rate-setting, underwriting, claims administration and overall financial solvency," said Charles Scawthorn, Principal, SPA Risk LLC. "We look forward to working with Karen Clark & Company to help foster a better understanding of these challenges and the feasibility of building a national catastrophe model."
The feasibility study is scheduled to be completed in mid-June. Karen Clark & Company will work with the NAIC to develop realistic timetables and cost projections based on the alternative approaches.
About Karen Clark & Company
Karen Clark & Company provides software products and consulting services that help insurance companies evaluate and improve their exposure data processes, to better understand catastrophe risk, and to more effectively utilize models and model results. Karen Clark & Company professionals are independent experts in catastrophe risk, catastrophe models, and catastrophe risk management who work with insurance company executives to enhance business strategies, competitive advantage, and financial results. For more information, please visit www.karenclarkandco.com.
About SPA Risk LLC
SPA Risk LLC is a consulting firm with special expertise and experience in natural hazards model development, risk assessment, and risk mitigation for agencies and companies with exposure to catastrophes such as earthquakes, hurricanes, fire, blast and other hazards. SPA is recognized by government, regulators, insurers and the financial industry for expertise and leadership in the field of risk assessment. Clients include the World Bank, Bank of America, the State of California, Federal Emergency Management Agency, US Geological Survey and various other insurance and corporate entities. SPA is an innovator - an example is OpenRisk: object-oriented, web- and GUI-enabled, open-source, and freely available software code for conducting multihazard risk analysis. The resulting body of code and applications are also referred to as OpenRisk. For more information see www.sparisk.com.
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|Date:||May 19, 2009|
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