New Cat Models Emerging
Lloyd's, the renowned British insurance market, reports the Oasis Loss Modelling Framework, launched in 2011 with the goal of delivering a new method of catastrophe modeling to the industry in 2013, has attracted numerous members, including the UK Met Office, University College London, Karen Clark & Co, JBA Risk Management and Perils AG.
Catastrophes such as the New Zealand and Japan earthquakes and Hurricane Sandy "continue to demonstrate the levels of uncertainty that can exist in model results," according to Lloyd's.
Its plug-and-play model makes it easy for new members to come into the market, according to Lloyd's. "We hope that the work we are doing with our members will help the existing modeling firms in developing their own approaches," said Trevor Maynard, head of exposure management and reinsurance at Lloyd's and director of Oasis. "For example, we encourage model developers to work with other emerging platforms."
"The issues of model uncertainty and change pose many difficult challenges for the industry," said reinsurance broker Guy Carpenter. "The 'black box' should no longer be left to make the decisions. Rather it should be considered a tool to help inform the decisions made by professionals."
"The Met Office knows a lot about European windstorms among other things, but not necessarily a lot about insurance conditions and terms," said Dickie Whitaker, project director of Oasis. "Since Oasis is giving away the simulation kernel and financial module it doesn't have to know about these. The Met office is now building a European windstorm model that it will license to the industry. By building a community and defining modeling standards, we are stimulating innovation supported by a viable commercial environment. Vulnerability and hazard specialists are joining Oasis along with exposure, run time, vizualisation, and satellite specialists."
According to Lloyd's, members will have access to four proof-of-concept models this summer for European windstorms, UK floods, North African quakes, and West Coast U.S. and Canada tsunami scenarios.
For more information, visit http://www.oasislmf.org.
Posted by Jerry Laws on Jan 22, 2013