What is a cat model?

Posted by Ivan Maddox on Dec 5, 2014 10:34:00 AM

Property insurers rely on many types of tools for risk analysis, but none quite so complex as the cat model. Short for catastrophe, cat modeling uses computer-assisted calculations to estimate the losses that could be sustained due to a catastrophic natural event. Perils analyzed include flood, hurricane (wind damage and storm surge), earthquake, tornado, hail, wildfire and winter storm. The principle function of cat models is to help insurers prove their financial solvency. 

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Topics: Natural Hazard Risk, Natural Catastrophe, Other Risk Models

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