Fiducitation: Catastrophe Modeling
Author: Shahjehan
Cheema & John Munson
Date: June 5,
2001 © 2001 Fiducite.com, Inc.
Fiducitation: A
synthesis of public Internet resources on the topic.
Instructions: Use the
Table of Contents to navigate the document. Each citation has up to four
distinct parts: Annotation, Clip, Source, and Cached File. Our Annotation
and Clip (text or graphic from source document) help you decide
whether to view the document. The source document may be viewed by clicking on
the Source URL or by opening the embedded Cached File. All
information is attributed to its source.
This Fiducitation is a synthesis of information relating to Catastrophe Modeling found on the Internet. It briefly discusses catastrophe bonds and it lists vendors of catastrophe modeling software and services.
Overview of Catastrophe Modeling
Modeling Samples & Case Studies
From Pin Maps to the World Wide Web
Annotation: This article
gives a historical perspective of how catastrophe modeling and real-time
catastrophe modeling have developed.
Clip: “The Internet in combination with
catastrophe modeling software provides our industry the ability to model every
submission, or an entire book of business, in an instant,” said Jack Graham,
chief executive officer of ICAT Managers.
Source:http://www.insurancejrnl.com/html/ijweb/publications/IJTexas/t030501/frompinmaps.htm
Cached File: 
Catastrophe Modeling
Annotation: White paper
describing catastrophe modeling from air, a leading vendor in catastrophe
modeling. Air pioneered catastrophe modeling in the insurance industry in 1987.
Clip: By
combining mathematical representations of the natural occurrence patterns and
characteristics of hurricanes, earthquakes, and other catastrophes, with
information on property values, construction types, and occupancy classes,
these simulation models generate loss estimates that provide an objective
standard for insurance professionals to make risk-management decisions.
Source: http://www.air-boston.com/NewsData/000030/Derivatives.pdf
Cached File: 
The Threat of Natural Hazards
Annotation: A
European-centric but comprehensive document on a full array of natural
disasters and their associated risk management.
Clip: Natural hazards have caused
significant economic losses in the past decades. In addition, we have seen a
constant rise in insured losses per year, which have grown from less than USD 5
billion in the 70s to more than USD 25 billion in the early 90s. Last year
confirmed this trend with the second-highest volume of losses.
Cached File: 
How Do Catastrophe Models Work?
Annotation: Generic flow
chart diagram of catastrophe modeling operation
Source: http://www.genre.com/CLOUGH.nsf/Doc/catmodels
Cached File: 
Technology Changes Cat-Risk Modeling
Annotation: Two speakers
give their points of view on how real-time cat modeling will impact the
insurance industry.
Clip: A.M. Best
Company hosts its Annual Insurance Information Management Conference in Boston.
Source: http://www.ambest.com/conferences/baltimore/sessions/10_18k.html
Cached File: 
Exposing Catastrophe Risk
Annotation:
A.M. BEST proposal to create an industry
database of property exposure data in order to enable the analysis of the
insurance industry's regional, local or national 
exposure to
catastrophic events.'
Clip: The impact
of natural catastrophes on an insurer’s financial strength and policyholder
protection has led companies, regulators and A.M. Best Co. to improve their
analyses of wind and earthquake perils. From A.M. Best’s perspective, this
analysis must continually be enhanced to keep pace with the increasing exposure
and sophistication of catastrophe-modeling science.
Source: http://www.bestreview.com/pc/1999-06/catastrophe.html
Cached File: 
The Evolving Market for Catastrophic Event Risk
Annotation:
An in-depth
look at catastrophic risk and financial innovations authored by prof. Kenneth
Froot of H.B.S.
Clip: In the
last year, the market for catastrophic event risk has witnessed important
change. The first large and truly successful catastrophe (“cat”) bonds have
been issued. New exchanges have opened, traded contracts created, and indexes
of cat losses introduced. The array of products confronting issuers and
investors has widened substantially.
Source: http://www.guycarp.com/pdf/evolvmkt.pdf
Cached File: 
Financing Catastrophe Risk: Capital Market Solutions
Annotation:
Gives an
overview of capital market solutions.
Clip: Only two
sources may be able to provide the capacity necessary to finance very large
catastrophe risks – the federal government, with its power to tax, and the $26
trillion capital market.
Source: http://www.iso.com/docs/stud013.htm
Cached File: 
Catastrophic Risk Management and Economic Growth
Annotation: Academic paper analyzing some methodological challenges and practices involved in catastrophic risk management, from a global economic view. This is a technical & macroeconomic view on the global impact of catastrophes.
Clip: The
economy is a complex system, constantly facing shocks and changes, in
particular with catastrophic consequences. Unfortunately, in traditional
economic theory there is no special problem of catastrophic
risks.
Source: http://www.iiasa.ac.at/Research/RMS/july2000/Papers/yuritania.pdf
Cached File: 
Lessons from the 1999 Turkey, Greece, and Taiwan Earthquakes
Annotation:
This July 2000 report, done by a combination
of industry leaders, uses data from turkey, Greece, and Taiwan to determine the
value of cat modeling technology.
Clip: The field
of catastrophe loss modeling has evolved tremendously in the past decade,
largely driven by the needs and financial interests of the insurance industry.
Source: http://www.iiasa.ac.at/Research/RMS/july2000/Papers/johnson_lessons0401.pdf
Cached File: 
Rhode Island Showcases Catastrophe Planning
Annotation: State wide effort to use catastrophe modeling to
prepare and respond effectively to catastrophes.
Clip: This
increase in coastal development means there is more to lose and more to be
protected.
While state agencies and communities are beginning to take natural
hazards
into account in land use and development decisions, most agencies, citizens
and
business owners do not understand their true exposure to natural hazards.
As such, they are unable to make informed decisions about actions to
reduce
those costs.
Source: http://www.ibhs.net/ibhsdocuments/pdf/rhodeis.pdf
Cached File: 
Seismic Source Model for New Madrid Region
Annotation: White paper
published by vendor to demonstrate capability of their software application -
catalyst
Clip: The
objective of this paper is to investigate how various recently developed hazard
models affect portfolio losses and to provide the basis for imbedding a
combination of these models in the Catalyst New Madrid module.
Source: http://www.ewb-catalyst.com/images/tech.pdf
Cached File: 
The three largest vendors are listed first and then the
list is ordered alphabetically.
AIR Press Release
Clip: AIR's
models simulate losses from natural catastrophes such as hurricanes, hail,
tornadoes, other windstorms, flood and earthquakes in over 20 countries.
Source: http://www.hoise.com/primeur/00/articles/monthly/AE-PR-02-00-32.html
Cached File: 
Risk Management Solutions
Clip: Any
company with financial assets exposed to catastrophes can benefit from
catastrophe modeling. Insurers, reinsurers, brokers, financial markets, and
corporations have all recognized the need to synthesize available scientific
research with quantitative techniques to evaluate the probability of financial
loss. RMS catastrophe models accomplish this objective.
Source: http://www.rms.com/Catastrophe/
Cached File: 
AON Re Impact Forecasting
Clip: Impact
Forecasting is a unit of Aon Risk Technologies that combines proprietary
software and engineering expertise to provide advanced risk management and
analysis services.
Source: http://www.re.aon.com/s_impactforecasting.asp
Cached
File: 
CATEX Web Site
Annotation: This exchange is not a direct vendor of real time
cat modeling but does have some capabilities built into its system.
Clip: An
Internet-based electronic trading system and Application Service Provider for
the insurance and reinsurance industry and risk managers worldwide.
Source: http://www.catex.com/
Cached File: 
E.W. Blanche Products
Annotation: This article by
business insurance provides details including price and capabilities of e.w. blanche's
new wireless products
Clip: business
insurance "online, modeling products central to broker's offerings"
business insurance, November 1, 1999 by sally Roberts reinsurance
intermediaries agree that the products and services they offer are what set the
brokers apart from one another in the highly competitive reinsurance
marketplace.
Source: http://rmisweb.com/rmisartc/110199a.htm
Cached File:
EQECAT
Clip: The
mission of EQECAT is to be the worldwide leader in providing state-of-the-art
catastrophe risk management, information, software, and consulting services to
property/casualty insurers and reinsurers, financial institutions, and large
corporations with significant property values. EQECAT meets the needs of its
customers by offering specialized catastrophe management insight through risk
management software and consulting services that incorporate science,
engineering, insurance, financial, and computer science expertise.
Source: http://www.eqecat.com/
Cached File:
Guy Carpenter - Support Services
Guy Carpenter & Company, Inc. is a leading global reinsurance intermediary. The firm advises insurance and reinsurance companies on the complex issue of risk management, and provides a comprehensive array of support services. Guy Carpenter structures and places reinsurance coverage and other risk-transfer financing with reinsurance firms and capital markets worldwide. The company employs 2,200 individuals located in 22 countries.
Source: http://www.guycarp.com/products/supanadv.html#cat
Cached File:
Herbert Clough: Catastrophe Modeling Group
Clip: Herbert
Clough is the reinsurance broker for General Re's clients. We provide
catastrophe limits, structures, pricing and risk analysis.
Source: http://www.genre.com/CLOUGH.nsf/Doc/catmodelgroup
Cached File: 
ICAT Managers Online Quote/Application System
Clip: Copyright: ©” geocode and analyze policyholders’ risk of loss from earthquake, hurricane, and other perils to assist agents in providing counsel to their clients about their exposure to natural disasters. icat will underwrite risks with total insured values (combined structure, and business interruption) less than or equal to $7.5 million. standalone structure or contents values may not exceed $5.0 million. icat’s products include: difference in conditions coverage in California, Oregon, Washington, Utah, Alaska and Hawaii.
Source: http://www.icatmanagers.com/about.cfm
Cached File: 
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Swiss Re
Annotation: Article by Bruno Porro, in Lloyd’s List
Insurance Day, 14 February 2001
Clip: In 1999
alone, insurers paid claims totalling US$24.4bn for storm, earthquake and
flood losses, making man-made catastrophes of US$4.2bn seem tame by
comparison. Two factors are significant for natural perils reinsurance as
offered by Swiss Re: annual loss amounts are subject to extreme
fluctuations and since 1989, there has been an uninterrupted trend toward
increasingly higher loss amounts.
Source:http://quake.usgs.gov/research/deformation/modeling/reviews/Turkey/2001LloydslistIstanbul.html
Cached File: 
URI Model Becomes Part Of Hurricane Prediction System
Clip: UniSci is
a newsletter of science stories from the major research labs. This article
refers to the impact the two founders of Accurate Environmental Forecasting
have had on catastrophe modeling.
Source: http://unisci.com/stories/20003/0720006.htm
Cached File: 
Vista Real-Time Capabilities
Annotation: Vista's web site
describing their real time capabilities.
Source: http://www.vistainfo.com/htm/sm_about_capabilities.htm
Cached File: 
To access the annotations of these reports, go
to TowerGroup.com & search on titles:
Tower Group: The Technology of Modeling Natural Catastrophe Risk
Source: http://www.towergroup.com/public/ras/default_ras.asp?main=search.asp
The Challenge and Methods of Modeling Natural Risks
Source: http://www.towergroup.com/public/ras/default_ras.asp?main=search.asp