Adityam Krovvidi, Risk Analytics Advisor at ValueMomentum

Catastrophe modeling has been central to any insurer’s risk management. However, the global catastrophe losses in the last two decades have grown a lot, mainly driven by growing exposure and climate change. Insurers need to move beyond their traditional modeling methods.

What this means is they need to increase their resilience of their operating models. They need to strengthen their data pipelines. They need to develop their own view of risk and integrate CAT modeling into their enterprise risk management.

Catastrophe modeling must be treated as a strategic imperative — not as a siloed function to buy reinsurance. When done right, catastrophe modeling can help in underwriting discipline, better exposure management, and good risk mitigation.