The Importance of Catastrophe Modeling

This article from CalMatters on the Global Sustainable Insurance Summit further highlights the market need to leverage catastrophe models for both ratemaking and pre-bind underwriting analytics.

“When Lara asked Farmers Insurance CEO Raul Vargas what it would take to get insurers to start writing policies in California again after they stopped or delayed new business, Vargas pointed to one of the regulations Lara unveiled recently: allowing insurers to use catastrophe modeling when setting their rates. Catastrophe modeling would let insurers use future risk assessments combined with historical data to help price their premiums.
“Insurers need the confidence to price correctly for the risk,” Vargas said, adding that Farmers has had “constructive conversations” with California’s Insurance Department that has allowed the company to remain in the state.”

Insight Catastrophe Managers helps companies writing in Catastrophe exposed states automate the catastrophe modeling process for underwriting analytics. DM me to learn more about how we enable our clients to make better data-driven decisions.