Catastrophe bonds and other insurance-linked securities, which powered last year’s highest-returning hedge fund strategy, are built on calculations that can underestimate a new breed of risk stemming from high-frequency events such as wildfires and thunderstorms, according to veteran investors.
Tag: cat modeling
California Regulators Consider Insurers’ Use of CAT Models for Property Rates
If California regulators decide to permit the use of catastrophe (CAT) modeling to set rates, they must balance two interests: public transparency and the protection of proprietary information.
2019 California Wildfires Signal ‘New Normal’ for Insurers: AM Best
Given the proliferation of wildfire losses in California, AM Best believes insurers will continue to re-examine this peril, and likely make adjustments to risk appetites, capital management strategies and reinsurance partnerships, according to a new AM Best commentary. Enterprise risk management practices and risk-scoring models used by catastrophe modeling firms also likely need to become… Continue reading 2019 California Wildfires Signal ‘New Normal’ for Insurers: AM Best