Catastrophe Modeling (CAT Modeling): A Benchmark for Determining Risk

More and more, throughout the United States, complex software programs for catastrophe (CAT) modeling are serving as a benchmark for determining risk in various geographical areas. While not all property and casualty insurers rushed to adopt this approach, dramatic rises in certain estimates of loss coupled with other challenges has led their sentiment to change. Underwriters are complying more and more with the demand for more precise and accurate catastrophe modeling data.

Why the Change?

The property portfolio impact of the new model fluctuates based on the carriers’ consolidation of business and major areas of risk, which can vary based on geographical location, occupancy types, and how often severe events are estimated to occur. Increased hurricane occurrence, stronger inland wind criteria, greater vulnerability to wind and higher levels of storm surge are considered the main drivers warranting additional data collection.

Mitigate the Risk

In an effort to meet the new demands of catastrophe modeling data collection, entities can mitigate the risk by starting with the following:

  • Identify what your needs are and begin to plan. If you aren’t sure, seek the help of an expert.
  • Ask your insurance broker if they are using new requirements for the collection of catastrophe modeling data
  • Contact a professional appraisal firm and ask what their standard appraisal service includes and how they can meet your needs most efficiently
  • Research software solutions available to assist with the consolidation of multiple spreadsheets and large amounts of data into a single, reliable, comprehensive database
  • Hire a professional appraisal firm to collect any and all necessary data to comply with the additional CAT modeling requirements and ensure you are properly valued and rated
Let Centurisk Help

As CAT modeling software programs continue to evolve, appraisal firms must develop services and solutions to keep up with the demands. Centurisk continuously customizes our standard appraisal services and property risk software solutions to meet the needs of clients across the country.

Over the past several years, we have increased the amount of data collected as part of our standard appraisal service and have spent countless hours researching catastrophe modeling programs used throughout the insurance industry. We train our staff to accurately collect the property data needed for each unique system and understand that any software model is only as good as the data collected.

If you’d like to speak with an expert in more detail about our appraisal services, including the collection of data for catastrophe modeling purposes, contact Centurisk today.

And for more information on a related type of modeling data you’ll want to track — convective storm modeling data — you’ll want to check out this helpful blog post.

Want to learn how Centurisk can help you gather the CAT data you need for greater insurance accuracy and potentially better rates? Simply fill out the form below and a member of our team will be in touch!

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