Annual Meetings-3. CAT Modeling Strategies for Inland Marine Challenges

3. CAT Modeling Strategies for Inland Marine Challenges

Pdf Summary

The 2025 annual meeting presentation by Karen Clark & Company focused on advancements in catastrophe risk modeling, particularly as they apply to inland marine challenges. This technology, pivotal for risk management in the insurance sector, has evolved significantly since its inception in 1987 by Karen Clark, who revolutionized the way hurricane risks were assessed. The presentation detailed the construction of catastrophe models, which rely on vast "event catalogs" to estimate potential losses from events like hurricanes, wildfires, and more.<br /><br />Karen Clark & Company emphasized the importance of models incorporating the impacts of climate change for more precise projections. Advanced components such as AI and physical modeling have enhanced these models, offering detailed risk metrics and tools for underwriting and portfolio management. The firm highlighted its unique offerings such as daily Live Event Loss updates and metrics like Exceedance Probability (EP) Curves and Probable Maximum Loss (PML).<br /><br />Moreover, specific challenges associated with modeling inland marine risks were discussed, including the inherent mobility of such properties and difficulties modeling assets like solar farms, builders' risks, and docks. Strategies to improve modeling in these areas include assigning unique codes for construction types, using time-dependent vulnerability models, and employing high-resolution mapping for enhanced accuracy.<br /><br />Overall, the session underscored the necessity of using catastrophe models alongside traditional underwriting techniques to effectively manage risks. It reaffirmed the pivotal role of precise data input, highlighting the adage "garbage in, garbage out" to stress the importance of accurate and relevant information for reliable modeling outcomes. The meeting concluded with a focus on the significance of adapting models to address the specific needs and assumptions of various inland marine businesses, leveraging company resources to enhance modeling accuracy and minimize uncertainty in risk evaluations.

Keywords

catastrophe risk modeling

inland marine challenges

Karen Clark & Company

climate change impacts

AI in risk management

Live Event Loss updates

Exceedance Probability Curves

Probable Maximum Loss

underwriting techniques

high-resolution mapping