Catastrophe Models
topic on 1 show · 4 statements across 1 episodes
4 statements about Catastrophe Models, every show
Boomhauer: Proprietary insurer catastrophe models are impossible for objective third-party evaluation.
“Almost all of the models that are applied by insurers today are developed by for-profit private companies. It makes them all a little bit of a black box. It makes them all basically impossible for objective third parties to evaluate”
Boomhauer: Modeling rare disasters requires centuries of nonexistent historical data
“If you have a disaster that occurs with a one quarter of one percent probability in, in a given year, in order to really nail down the expected annual losses from that kind of event in a given place, you need hundreds and hundreds of years of data, and we just…”
Boomhauer: Insurer market withdrawals are ad-hoc reactions to imperfect disaster data
“There is also absolutely a sense of kind of reactiveness here that something bad happens and let's get out of the place where the bad thing is happening. And that I agree that there's this ad hoc, a little bit of an ad hoc sense to it, but fundamentally I thin…”
Boomhauer: Disaster risk requires simulation models due to thin historical records
“Natural disaster events are just fundamentally different because we, you know, thankfully have not had a thick enough historical record of disaster events that we can price these things using the statistical methods that are standard in other lines of insuranc…”