An interactive catastrophe risk modelling tool using maps, metrics and real time updates called RiskInsight and created by Karen Clark & Company (KCC) is branding itself as the insurance industry’s go-to for digital catastrophe analysis.
The software is debuting through CATLAB Workshops, the first one brought a handful of insurance companies together earlier in December in Boston to analyze the financial impact of various hurricane scenarios.
Karen Clark said she expected the next CATLAB, slated for March 2017, to cover tornados, lightning and hail storms because of the dissatisfaction with current risk modeling around these events.
“What’s different about the KCC models is they’re open, the clients can actually see the inner workings of the models, you can’t see that in a traditional model,” Clark said. “The idea behind CATLAB is to immerse insurers more into what underlies the loss estimates.”
Clark said the workshops KCC runs allow insurers to ask ‘what are the assumptions in the risk models?’ and that RiskInsight enables insurers to touch those assumptions and change them, illustrating the impacts of their loss estimates.
The event in Boston, for example, allowed insurers to track hurricanes, generate wind footprints, superimpose that on their exposures, estimate claims and estimate losses.
“They can’t do that with other tools,” Clark said. “The same thing will be true of severe convective storms (in March).”
The day after they get claims, insurers can put their actual claims into the RiskInsight software to better hone its accuracy, Clark said.
“When you have your claims data matched to the wind speed you can do a claims analysis,” Clark said. “You can say ‘Where the wind speeds were 100mph, my mean damage ratio was 2%, the model says it’s 3% so my claim is better than the model so I can reduce that.”
Customizing factors and visualizing effects of potential natural disasters is a capability mostly isolated in the halls of climate organizations who aren’t taking into account where the policyholders of a given company live, argued Clark.
Related stories:
Global disaster losses jump in 2016
Private flood insurance in a post-Katrina world
