Climate change redefines cat modelling

Catastrophe modeling has been revamped as a direct result of 2004 and 2005’s catastrophic weather events, speakers told an audience at a symposium sponsored by XL Re Europe Ltd. Insurers and reinsurers are not as confident about cat models and as a result have changed their views on weather-related risks, according to managing director ofAIR Worldwide GmbH Yrn Tatge. Tatge says this change in the industries outlook is a direct result of the weather-related events that occurred in 2004 and 2005.”The future ain’t what it used to be,” Tatge says. Robert Muir-wood, chief research officer at Risk Management Solutions Inc., says recent record hurricane-related losses are defining cat modeling. The future of catastrophic modeling includes factors such as human behaviour and the way claims are made, Muir-wood says.David Stephenson, a professor in statistical climatology at the University of Reading in England, says the earth’s climate is changing in a “very profound” way. Greater cooperation between the climate change scientific community, catastrophe modeling community as well as the insurance and reinsurance communities is necessary to facilitate the positive understanding and change of future cat modeling initiatives.