Catastrophe risk modelling has revolutionised the way insurers assess, price and manage disaster risks. Its usefulness to society could be even further enhanced by integrating the latest climate science, observational capabilities and emerging technologies.
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There is much more that could be done to extend the value of catastrophe (Cat) risk models for the (re)insurance industry and wider society, but this requires a collective endeavour across (re)insurers, brokers, model vendors and other key stakeholders, says Maryam Golnaraghi, Director Extreme Events and Climate Risk
As the economy becomes more digitalized, the role of insurance in society is changing from one concerned primarily with loss indemnification to a broader advisory service for customers on how to prevent, mitigate and manage their risks.
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The insurance industry plays a key role in de-risking infrastructure and mobilising long-term private capital to climate risk-resilient projects, agreed a group of decision makers and international experts summoned in Toronto by The Geneva Association.
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The unique characteristics of cyber risk imply that exposure measurement and modelling approaches that have been developed for other perils cannot easily be transferred to cyber risk. The insurance industry has made progress in developing the technical capabilities to handle these distinct characteristics of cyber risk, but there is still some way to go.
Cyber insurance offerings and premium volumes have expanded sizeably. Keeping up with demand is challenging and sustainable growth in the cyber insurance market should not be taken for granted, as accumulation risks need to be addressed in the context of a hyperconnected digital world.
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