January 30, 2017
Rating agencies are revising how they incorporate catastrophe loss information into their rating methodologies. Karen Clark discusses these changes and how they could impact reinsurance purchasing and the ILS market.
Rating agencies are revising how they incorporate catastrophe loss information into their rating methodologies. Karen Clark discusses these changes and how they could impact reinsurance purchasing and the ILS market.
In an article containing commentary from professionals regarding risks the insurance industry faces in 2017, Karen Clark comments that the industry is still not prepared for a storm as intense as 1992's Hurricane Andrew striking Downtown Miami or a similar urban area.
Karen Clark & Co. released the latest version of its RiskInsight open loss modeling platform. Version 4.4 includes enhancement to the custom model building capabilities and client integration modules, as well as performance improvements.
Karen Clark & Company has updated RiskInsight, its loss modelling platform, to facilitate importing custom events and event intensity files, and to visualise and verify hazard data. Version 4.4 provides "plugins" for creating damage functions based on attributes that are not typically used in traditional models.
Hurricanes and earthquakes that produce major losses are rare phenomena, so there's not a wealth of scientific data for estimating the frequencies of events of different magnitudes in specific locations. But when a significant event occurs, the tens of thousands of resulting claims provide the big data surrounding catastrophes, and this data is very valuable for improving catastrophe models. Here, Karen Clark explains how insurers can leverage their own claims data for more credible catastrophe loss estimates and for competitive advantage.
Newer, open hurricane models are addressing three "wishes" for the insurance industry, offering less volatile loss estimates, higher visibility into the key assumptions driving losses, and more intutitive and actionable risk metrics. Traditionally, users have interacted with the models to manage hurricane risk, but thanks to these newer platforms, users now have the opportunity to customize and gain more insight into loss potential.
Karen Clark discusses changes to catastrophe modeling, including demand from insurers and reinsurers for platforms that allow more sources and customization of models to reflect the individual organization's view of risk.
In 1992, insurers were shocked by the losses caused by Hurricane Andrew, and many never believed the losses could exceed $13 billion as projected by the first hurricane model. As 2016 hurricane season begins, Karen Clark urges insurers to avoid the complacency of the early 90s about a potential direct hit on Miami.
Cyber risk is rapidly evolving, with a number of sizeable data breaches grabbing headlines in recent years. Insurers, brokers and modelers are working diligently to find a solution to capture risk information and create models. Karen Clark discusses the challenges of modeling emerging risks versus traditional perils, like hurricanes.
Karen Clark & Co. has launched RiskInsight Version 4.3, which features enhancements to its interactive dashboards, custom model building tools and job manager. The updated version of the loss modeling platform also makes it possible to track tornado and severe convective storm, or SCS, events in real time.
Karen Clark & Co. has announced the release of RiskInsight Version 4.3, an update which includes enhancements to its interactive dashboards, custom model building tools and job manager.
RiskInsight Version 4.3 updates include expanded event catalog creation capabilities and an updated job manager that makes it easier to set up complex analyses and distribute them across multiple processors. The platform supports custom models for all peril types, including flood and severe convective storm (SCS), and Version 4.3 will allow users to track tornadoes and SCS in real time, immediately assess exposures, and estimate likely losses.
Karen Clark & Co. has released Version 4.3 of the RiskInsight open loss catastrophe modeling platform. Version 4.3 supports custom models for all peril types, including flood and severe convective storm (SCS), along with expanded event catalog creation capabilities.
Catastrophe models for severe convective storms have existed for decades, but the model loss estimates lack credibility for most insurers. Here, Karen Clark explains why and suggests a new modeling approach.
Karen Clark is profiled as one of the insurance industry's top female leaders. In this Q&A with National Underwriter, Ms. Clark discusses her decision to work in the industry and advice for women looking to enter insurance, her greatest achievements, challenges and opportunities facing the industry.
Karen Clark calls for the insurance industry to embrace open platforms and to move away from overreliance on traditional models. Here, Ms. Clark discusses the emergence of open modeling platforms, the development of Karen Clark & Company's RiskInsight and the future of modeling.
Nozar Kishi and Christopher Mossey have joined the senior management team at Karen Clark & Co. Dr. Kishi brings more than 20 years of catastrophe modeling experience to the firm as Vice President, Model Development. Mr. Mossey comes to KCC with 20 years business development experience and will serve as Vice President, Client Development.
Karen Clark & Co. deepens its expertise with the addition of Nozar Kishi and Christopher Mossey to the firm's senior management team. Dr. Kishi joins as Vice President, Model Development, and will lead several modeling initiatives including the Japan typhoon and earthquake Reference Models. Mr. Mossey joins as Vice President, Client Development and will work with major insurers and reinsurers to leverage the firm's RiskInsight open platform and comprehensive catastrophe management toolkit.
A 2014 U.S. Geological Survey report on earthquake forecasting recognized the possibilities of multi-fault ruptures and background events, where there are no known faults and historical events. Here, Karen Clark explains the implications of the report for insurers and how insurers can better manage their future earthquake losses.
Karen Clark & Company's new RiskInsight Earthquake Reference Model is the first in the industry to account for the findings of the latest US Geological Survey. The new report better recognizes the uncertainty in the locations and magnitudes of future events and includes more multi-fault rupture scenarios.
Karen Clark & Company released a new Earthquake Reference Model as part of the RiskInsight open loss modeling platform to incorporate updated seismicity assumptions and ground motion attenuation functions based on the latest US Geological Survey.
There is an increased probability of magnitude 8 and larger events hitting California, according to a new Karen Clark & Company analysis of the latest US Geological Survey. Karen Clark & Company is the first modeling company to incorporate this set of USGS findings into its earthquake model tool, accounting for new information about risks to California and the Pacific Northwest.
Karen Clark & Company introduces the new RiskInsight Earthquake Reference Model incorporating the latest US Geological Survey report. The model accounts for all fault-based seismic sources and implements gridded background seismicity to account for unknown faults. It can be used to estimate losses on portfolios of properties along with individual policies and accounts.
Karen Clark & Company has released the RiskInsight Earthquake Reference Model to account for the new data and multi-fault rupture scenarios, including an increased probability of magnitude 8 and larger events in California and the higher frequency of earthquakes in the southern section of the Cascadia Seismic Zone.
Hurricane Patricia was one of the strongest storms ever recorded, and its losses could have been far worse had the storm taken a different path. A new report from Karen Clark & Company looks at the potential losses if a storm of equal intensity were to hit downtown Miami, highlighting a growing need for insurance-linked securities to supplement traditional reinsurance for peak U.S. exposures.
Karen Clark discusses industry exposure to hurricanes and earthquakes and why insurers should be focused more on a severe Florida hurricane than a California quake. According to Ms. Clark, a quake would you would need almost a half a trillion dollar loss for the insurance industry to have a loss the size of Katrina. That type of earthquake event is significantly less probable than a $250 billion loss from a Miami hurricane.
According to a report by Karen Clark & Company, the Miami area is the fourth most vulnerable region to storm surge in a 100-year hurricane event. The 100-year event, which for Miami is a Category 5 storm with top wind speeds of 165 mph, would cause nearly $80 billion in losses due to storm surge.
Advancements in technology have made it possible for insurers to build their own catastrophe models, creating a significant opportunity for the insurance industry. Here, Karen Clark explains why insurers are smart to build bespoke models, the characteristics of a model and the model building process.
Karen Clark & Company released an update to RiskInsight® that includes more detailed and interactive underwriter and CEO dashboards, advanced model-building tools and enhanced global mapping capabilities. The updates will enhance user experience and allow insurers, resinsurers and ILS firms to generate their own views of risk.
Karen Clark & Company announced an update to its RiskInsight® platform, helping insurers and reinsurers to better create their own view of risk as expected of them by rating agencies and regulators. The RI4 update includes enhancements to the platform's model-building tools, HazardMapper and DamageRatesManager, to make it easier for model builders to create high resolution probabilistic catastrophe models reflecting their own knowledge, expertise and views of risk.
The newly released RI4 update to RiskInsight® allows insurers and reinsurers to build hurricane and earthquake models anywhere in the world by adding custom event catalogs and damage functions appropriate for specific peril region. The open platform tool’s update includes detailed global soil maps and terrain datasets covering all countries and territories.
Karen Clark & Company released a new update to its RiskInsight® open model platform, which will allow firms to develop and generate high resolution probabilistic catastrophe models reflecting their own knowledge, expertise and views of risk. This capability is a key development for the reinsurance and ILS market in particular.
With the RI4 update for RiskInsight®, users will have access to advanced model-building tools as well as better mapping capabilities and enhanced dashboards to generate their own views of risk.
Although much attention is paid to New Orleans and New York, the Tampa/St. Petersburg area is actually more vulnerable to storm surge flooding than those cities. A report from Karen Clark & Company found that wider, more gently sloping continental shelves with large shallow water areas put the Florida coastline at high risk. Other Florida cities ranking in the top eight U.S. cities most vulnerable to storm surge include Miami, Fort Myers and Sarasota.
To mark the 10th anniversary of Hurricane Katrina, catastrophe risk experts studied the potential losses for U.S. cities vulnerable to storm surge, with new research pointing to Tampa as most at risk. Here, Trading Risk compares rankings from Karen Clark & Company's "Most Vulnerable US Cities to Storm Surge Flooding" report with other industry estimates.
Hurricane Katrina created significant change in the insurance industry, from risk management to preparedness and catastrophe modeling. Karen Clark discusses the post-Katrina development of open loss modeling platforms and the characteristic event method for monitoring exposure accumulations.
To mark the 10-year anniversary of Hurricane Katrina, Reactions examines how the storm changed the re/insurance space, including the spur in innovation for the modeling industry in response. Exposure data quality and models that did not account for storm surge were cause for much of the shock insurers felt after Katrina. In response, Karen Clark founded Karen Clark & Company to address the gaps in traditional models by creating a more transparent tool for evaluating risk and exposure.
A decade after Hurricane Katrina devastated New Orleans, coastal cities are still extremely vulnerable despite infrastructure such as levees. A recent Karen Clark & Company report on cities most vulnerable to storm surge is cited in this analysis of continued risk for U.S. cities.
Flooding from a 100-year hurricane could spur losses exceeding US$100 billion in three cities – Tampa Bay/St. Petersburg, New Orleans and New York – according to a new report from Karen Clark & Company. Due to its unique coastline features, local bathymetry and the low coastal elevations, Tampa Bay/St. Petersburg ranks as the most vulnerable.
The Tampa Bay/St. Petersburg area is the most vulnerable U.S. region to flood damages from a 100-year hurricane, a new study from Karen Clark & Company found. Tampa's 100-year hurricane is defined as a strong category 4 with top winds of 150 mph, and storm surge damages from such a storm would reach up to $175 billion. The study also ranks Fort Myers, Miami and Sarasota in the top eight most vulnerable U.S. cities.
Following Hurricane Andrew, insurers realized the importance of catastrophe models in managing risk. More than a decade later, their overdependence on the traditional models became apparent in the wake of Katrina. Here, Karen Clark discusses the innovation that occurred after Katrina to bring greater transparency to risk modeling.
The insurance industry faced unanticipated losses in the wake of Hurricane Katrina, revealing an overreliance on traditional catastrophe models. In response, the industry has seen a number of crucial advances in open platform technology and storm surge modeling to better manage catastrophe risk.
A new report from Karen Clark & Company finds Tampa and St Petersburg are the US cities most vulnerable to storm surge risk, with a loss potential of $175 billion. The report also notes that most of the flood damage potential, across the ten most vulnerable cities, is not currently insured, presenting a big opportunity for insurers.
Due to demographic factors, Canada is more vulnerable to floods and earthquakes than hurricanes. With the exception of a few fast-moving hurricanes, like the Great New England of 1938 and Hazel of 1954, Canada has not been greatly impacted by North Atlantic storms. Here, Karen Clark looks at whether climate change and increased hurricane intensity could expand geographic impact and make Canada more susceptible to North Atlantic storms.
Climate change has had no measurable impact on hurricane activity to date, according to Karen Clark. The loss potential for the catastrophe market resulting from North Atlantic hurricanes is basically the same this year as it was last year, which is roughly the same as five years ago, and will most likely be the same in another five years.
While climate change is impacting hurricane formation and intensity, the five-year time horizon relevant to most investors shows that other factors are more important to predicting cat losses, such as accurately forecasting hurricane landfalls, according to a report from Karen Clark & Company. Investors with a longer investment horizon should keep in mind that longer-term conditions should see a higher demand for catastrophe reinsurance.
Losses from hurricanes could double by the end of the 21st century due to conditions created by climate change. Storm surge losses are likely to increase with rising sea levels, and greater maximum wind speeds will compound the hurricane losses in vulnerable areas. These changes will drive demand for catastrophe reinsurance in the long-term, but the near-term market should remain relatively unaffected.
Investors in catastrophic hurricane insurance markets have little to fear from the effects of climate change because their time horizon– typically three to five years – is much shorter than the time frames climatologists consider when studying climate change, according to a report from Karen Clark & Company.
Despite predictions of a quiet hurricane season, Category 5 storms can happen at any time. Karen Clark reflects on Hurricane Andrew, one of only three Category 5 hurricanes to hit the U.S coast since 1900, which hit during an inactive hurricane season.
In this profile, Karen Clark shares her perspective on her career, leadership and innovation. Ms. Clark discusses the passion that led her to create the first cat modeling company and to continue to develop new technologies and resources for the insurance industry.
As of last year, U.S insured property values exceed $90 trillion with significant pockets of concentrated value in vulnerable coastal areas. New risk management metrics, like the Characteristic Event approach, can better help monitor these exposures, according to a new report from Karen Clark & Company.
Highly vulnerable areas such as metro-Miami, Los Angeles, the Galveston-Houston region and Atlantic coasts account for a large portion of the U.S. insured property values. A new report from Karen Clark & Company calls for the insurance industry to adopt additional tools to develop a more comprehensive view of risk and to better understand the potential losses accompanying increasing property values.
Karen Clark & Company’s new report, Increasing Concentrations of Property Values and Catastrophe Risk in the US, examines the potential impact of rising property values and how innovative insurance and reinsurance methods and insurance-linked securities (ILS) can more effectively monitor their concentrate exposure.
Karen Clark & Company has found, when contents and time element exposures are added in, estimated insured property values in the U.S. exceed $90 trillion. Increasingly concentrated pockets of exposure leave insurers vulnerable to mega-catastrophe losses due to natural disasters.
A new analysis from Karen Clark & Company has found that if a 100 year hurricane were to hit Miami, it would create $250 billion in losses, which is double what’s projected by current PMLs. Increased property values and a high concentration of value has made urban coastal areas more vulnerable than ever, and insurers need to develop a more comprehensive view of their exposure in order to manage risk in these regions.
As noted in a new report from Karen Clark & Company, coastal property values in Florida have risen from $870 billion to over $3.7 trillion since Hurricane Andrew struck south of Miami in 1992. Because of steadily increasing property values, in Miami and other U.S. coastal areas, the potential insured losses from natural disasters are much larger than what most insurers have assumed their maximum losses could be.
Karen Clark & Company estimates that insured property values increased 9% from 2012 to 2014. In a new report, Increasing Concentrations of Property Values and Catastrophe Risk in the U.S., KCC uses Characteristic Events to illustrate why insurers should be monitoring exposure concentrations in light of increasing property values in vulnerable areas like California, Florida and Texas.
The insurance industry typically uses multiples of probable maximum losses (PMLs) to manage risk, and rating agencies and regulators rely on those calculations to monitor solvency. However, PMLs do not account for the increasing property values and concentrated areas of exposure along the U.S. coastline. A new report from Karen Clark & Company identifies these vulnerable regions and offers the Characteristic Event methodology as an additional tool insurers can utilize to gain greater insight into their exposure to losses.
Highly concentrated property values mean insurers will face losses that far exceed their estimated 100 year probable maximum loss, according to a new report from Karen Clark & Company.
Property values along the coasts and in earthquake-prone areas continue to grow faster than the general rate of growth across the country, according to a new report from Karen Clark & Company. The cost to replace structures damaged by natural disasters has grown too, which is a key reason insurers should be incorporating new methods of monitoring their concentrated exposure.
The variety in types of flood makes it difficult to define the peril and develop one standard catastrophe model. Despite this challenge, insurers can use open modeling platforms to evaluate flood risk. Here, Karen Clark examines flood risks for the Canadian market and how scenario-type models can inform underwriting and risk management decisions.
Insurers and reinsurers are looking for access to climate-related data, and catastrophe modeling companies are updating their tools to meet the demand. Karen Clark discusses how the RiskInsight® HazardMapper module helps clients to test the impact of potentially more frequent extreme weather events on their portfolios.
The catastrophe model-generated EP curves—and more specifically the "probable maximum losses" (PMLs) derived from those curves—provide only a partial picture of a company's large loss potential. Adding newer information on return period events, where the probabilities are based on the hazard versus the loss, gives more insight into tail risk and provides advanced metrics for monitoring "informal" risk tolerances. Here, Karen Clark illustrates how one chart can summarize multiple risk metrics for a succinct and complete picture of your company's catastrophe loss potential.
Karen Clark & Company announced the release of its detailed, high resolution and fully transparent storm surge model for the U.S. The new storm surge model accounts for all of the influences on coastal flooding, including storm intensity, radius of maximum winds, coastal bathymetry, and the presence of inlets or bays.
The new US storm surge model from Karen Clark & Company, which will be presented to the Florida Commission on Hurricane Loss Projection Methodology this month, allows users to identify locations vulnerable to storm surge flooding.
Because companies feel they can't assess the loss potential for flood and storm surge accurately, they are hesitant to offer more insurance, according to Karen Clark. KCC's new U.S. storm surge model will provide insights to help the development of the private flood market.
Karen Clark & Company's new high-resolution U.S. storm surge model may help ILS investors to get more comfortable with this risk by offering greater transparency into localized perils.
Part of the RiskInsight platform, Karen Clark & Company's new U.S. storm surge model allows insurers to identify locations vulnerable to storm surge flooding, calculate the total insurable value they have exposed by water depth and apply detailed vulnerability curves to estimate losses.
The new U.S. storm surge model from Karen Clark & Company will allow insurers to determine of total insured value by exposed water depth and vulnerability curves as well as to assess portfolio losses with and without storm surge and leakage assumption. The model also produces the 100 - and 250 - year flood zones along the coast.
Karen Clark & Co. estimates the August 24 south Napa earthquake caused $1 billion in damages, of which 40 percent were residential losses. The estimate is more than twice the original early estimates by local governments. Of the $1 billion in damages estimated by KCC, only $100 million is covered by insurance.
Karen Clark explains the sizeable role of the U.S. market in the global insured catastrophe risk space and what portion of loss potential comes from East Coast alone.
Open platforms enable insurers and reinsurers to incorporate and test the impacts of new scientific research much faster than using the traditional vendor models. Here, Karen Clark explains how these new advanced tools are already being used for greater visibility into the key drivers of profit and loss and to gain competitive advantage.
Karen Clark discusses innovation, demand for open model platforms and the changes to access the insurance industry will see develop as we enter 2015.
In the wake of Superstorm Sandy, the insurance industry and legislators were actively discussing ways to achieve more transparent and effective flood modelling tools. Although legislation hasn’t sufficiently addressed U.S. flood perils, here Karen Clark describes how Big Data and open platform technology is enabling insurers to own their risks for flood and other perils.
Insurance-linked securities investors are now utilizing open platforms in addition to traditional models to assess risk, according to Karen Clark.
Karen Clark explains how insurers and reinsurers can construct their own catastrophe models for unmodelled perils in an open platform using four key components — the event catalog, event intensity footprints, damage functions and financial module — to convert damage to insured loss with full transparency.
Karen Clark joins A.M. Best TV’s Kate Smith for a discussion of Characteristic Events and how this new methodology is being used by insurers and reinsurers to manage hurricane and earthquake risk.
Using her frequent interactions with rating agencies as a guide, Karen Clark dispels some myths about what agencies want to know about the use of catastrophe models by carriers they rate and about carrier cat loss potential. It's not about the model, but about the model assumptions selected and the credibility of the loss estimates.
Karen Clark explains why, although overlooked by many insurance companies, the La Habra earthquake of March 2014 is a good indicator for the extent of damage that could be caused by a quake of a greater magnitude along the Puente Hills Fault. Ms. Clark calls for the industry to look at what could happen, not to rely solely on the research already available and based on past earthquake events.
A new briefing from Karen Clark & Company deconstructs what is known as the 2014 La Habra Earthquake, a magnitude-5.1 earthquake that hit the Greater Los Angeles area. The report examines what happened in March and analyzes the potential for significantly greater damage along the Puente Hills fault during earthquakes of greater magnitude.
A powerful feature of the characteristic event approach to risk modelling is losses from all lines of business can be aggregated for each event and the market shares calculated on a combined basis.
A 100-year hurricane could occur during "slow" hurricane seasons, resulting in significant, "surprise" insurance industry losses. Here, Karen discusses how KCC's Characteristic Event approach can help predict losses and expose vulnerability to better prepare insurers.
Karen Clark & Company’s new report on 100 Year Hurricanes explains why Texas may be due for its own Hurricane Andrew after a quiet 2013 hurricane season.
The probable maximum loss (PML) risk metric can lead insurers to have a false sense of security, according to Karen Clark & Company. This leaves insurance companies vulnerable to a 100 year Characteristic Event that could cause losses exceeding $100 billion.
Karen Clark explains how using the 100-year Characteristic Event can show insurers any concentrations of exposure and potential market share of any modeled losses at an individual landfall point.
For most companies a 100 year Characteristic Event (CE) loss will be much greater than a 100 year probable maximum loss (PML), according to a new report from Karen Clark & Company. The (CE) analysis gives ILS investors additional information – illustrating the exposure and loss potential of an issuer – which offers better estimates on financial losses.
Karen Clark discusses how updates to the USGS Seismic Hazard Maps will impact catastrophe models used to assess earthquake risk.
Karen Clark discusses the growing industry demand for more transparency in cat models and how open platforms that allow insurers and reinsurers to integrate the software with their own processes helps address key supplier risk.
Catastrophe modeling firms are changing their platforms to address insurer and reinsurer needs for more model choice and greater transparency —but they're not all doing it the same way. Here, Karen Clark explains the differences between multimodel platforms, open source and open platforms.
Karen Clark discusses the paradigm shift in catastrophe modeling as insurers and reinsurers are transitioning from closed-box traditional vendor models to the full transparency of open platform tools
In this Q&A, Karen Clark discusses the new capabilities of the RiskInsight platform, how it Is being used by insurers and reinsurers and how it compares to RMS(one) and Oasis.
Karen Clark & Co. announces that RiskInsight® is now a fully probabilistic loss estimation tool capable of generating exceedence probability curves, probable maximum losses and average annual losses.
Top 10 P/C insurers and global reinsurers are already using RiskInsight®, a now fully probabilistic loss estimation tool. With the new capabilities, RiskInsight® is now being used for pricing both individual policies and portfolios of policies.
Here, Canadian Underwriter takes a look at the new capabilities that make RiskInsight® a fully probabilistic loss estimation tool.
Karen Clark discusses the launch of Oasis and how open platform, multi-model technology, like KCC's RiskInsight ®, are changing the status quo of catastrophe risk management in the insurance industry.
Karen Clark dissects recent reports from the Intergovernmental Panel on Climate Change to explore the impact of human-induced climate change on hurricane activity.
Looking ahead to 2014, Karen Clark offers her perspective on changes to risk modeling and risk management as the industry seeks greater transparency and more control of assumptions. Ms. Clark predicts the next wave of innovation will provide tools for managing flood risks.
The insurance industry has relied on probable maximum losses (PMLs) for the past twenty years, but they no longer provide the robust risk metrics to truly managing risk. Here, Karen Clark explains how catastrophic risk assessment based on characteristic events gives more consistent metrics for measuring and monitoring risk over time.
Following a fairly inactive Atlantic hurricane season, Business Insurance examines the impact of a calm 2013. Karen Clark discusses the long-term average insured losses from Atlantic storms, which are driven by severity rather than frequency.
On the first anniversary of Supertstorm Sandy, Karen Clark & Company reflects on Sandy's damage and assesses the Northeast's vulnerability for future storms. Using RiskInsight® to examine storm surge, Karen Clark & Company estimates the potential losses for more probable storms.
In this look back on Superstorm Sandy, Karen Clark explains what damage Sandy would have done had it taken the path of the Hurricane of 1938 or 2011’s Hurricane Irene. Ms. Clark discusses the changing attitude about catastrophes post-Sandy.
Nearly one year after Superstorm Sandy, flooding remains a challenge for the insurance industry. Karen Clark & Co. has added a new component to its RiskInsight tool to allow businesses to simulate flood events and examine the loss spikes in order to better asses and proactively manage their risks.
Here, Karen Clark explains different types of floods and contrasts the challenges of modeling storm surge and inland flooding.
Karen Clark discusses the lessons learned from the 1938 Hurricane in this Q&A with Providence Business News.
The insurance industry is changing its view on catastrophe models as the sector looks for more transparency. Karen Clark explains why cat models are not the right tool for solvency and underwriting and how open platform technology, like RiskInsight, offer a better approach.
In this Risk Management 2013 report, Karen Clark helps explain how catastrophe models became popular among insurers and reinsurers in the 1990s and why relying too much on the models is an insufficient way to manage risk today.
To mark the 75th anniversary of The Great Hurricane of 1938, WBZ-TV Boston reflects on the damage to New England during the historic storm. Karen Clark explains why a similar storm today would cause damage and devastation unlike anything else we have ever seen before.
Karen Clark & Company helps put the Hurricane of '38 into perspective, using Characteristic Event methodology to determine what a similar storm would cause in losses today. Here, Boston Business Journal compares the Characteristic Event estimates to the insured losses from more recent storms Superstorm Sandy and Hurricane Katrina.
Reflecting on the severe damage caused by the Hurricane of 1938, Karen Clark & Company's report on 1-in-100 year events like the '38 storm is profiled. The report points out the potential for a similar storm today and why the track of a hurricane, not its category, is the best indicator of damage.
Approaching the 75th anniversary of the Great New England Hurricane of 1938, Insurance Journal profiles Karen Clark & Company's report on the potential insured losses for a similar storm today and how to better manage risks using Characteristic Event methodology. The report finds that following the same track would cause more than $35 billion in insured losses, while a track further to the west over Long Island would cause $100 billion in damages.
Karen Clark & Company's report on the present day impact of the Hurricane of 1938 is summarized in this Carrier Management article. The report notes that the footprint of the '38 storm has more than $15 trillion of property value today, which would compound the losses incurred by such a storm.
In this Q&A, Karen Clark discusses the benefits of open platform technology, like KCC's RiskInsight®, and the new approach to risk management being adopted by insurers and reinsurers.
Following recent extreme flooding events, the Canadian insurance industry is re-assessing their approach to risk management. Given the highly localized nature of precipitation and the possibility for flash flooding to occur anywhere, flooding is more commonly assessed by its post-event flood footprint. As Canada considers the need for overland flooding insurance, Karen Clark helps explain why these severe precipitation events cannot be explicitly modeled and the subsequent losses estimated.
Traditional catastrophe models are not the final answer to risk management, and companies need to build proprietary views of risk to address this disparity. Flexibility, transparency and consistency are driving the new generation of risk models. Karen Clark explains why a shift to these open and customizable platforms will lead from risk modeling to true risk management.
Current catastrophe models leave insurers vulnerable to large losses in tornado zones explains Karen Clark in Insurance Day. Today's models underestimate loss potentials for individual insurance companies due to incomplete data and bias. Here, Karen discusses how the localized nature of tornadoes combined with undersampling impedes the models' ability to fully account for areas of exposure.
Expert forecasters predict there will be more and stronger hurricanes this year compared to last year. Karen Clark comments on Superstorm Sandy, and notes the latest climate change research points to a decrease in the frequency of tropical cyclones but an increase in intensity over time.
In this in-depth article examining catastrophe risk modeling, Karen Clark comments at length on the limitations of traditional vendor models and the new generation of tools to help insurers and reinsurers better understand and more effectively manage catastrophe risk.
This article examines the features and benefits of WindfieldBuilder™, a new tool for creating hurricane tracks and wind speeds that can be licensed as part of KCC's RiskInsight® platform.
An article outlining the features of WindfieldBuilder™, Karen Clark & Company's new tool that allows users to create hurricane tracks, wind speeds and windfields for analysis purposes.
An article reports on the launch of Karen Clark & Company’s WindfieldBuilder™ tool for creating hurricane footprints and estimating losses.
This article highlights the benefits of the newly launched WindfieldBuilder™, which allows users to create hurricane tracks and parameters and estimate damage to their exposures in a given region.
In her second quarterly article for Carrier Management, Karen Clark provides a primer for carrier CEOs on hurricane forecasting and on planning for and managing the risk of large hurricane losses.
An article stemming from the 2013 RIMS Annual Conference & Exhibition in Los Angeles presents Karen Clark's view that the current catastrophe modelling process is flawed, and a new approach is needed. Ms. Clark calls for a more open platform to help companies understand the risk.
An article reports on businesses adapting product and service offerings to align with needs resulting from a changing climate. Karen Clark is quoted on the need to rebuild resilient communities.
An article notes Marsh's "Energy Market Monitor" report advocates greater scrutiny of catastrophe and contingent business interruption limits by insurers. Karen Clark agrees, noting models provide very rough estimates and not final answers.
Karen Clark authors an article exploring myths and truths surrounding U.S. hurricanes and their impact. Ms. Clark describes current hurricane and catastrophe risk management in light of historic data and Characteristic Events.
Karen Clark contributes to an article focusing on the trend by the insurance industry to urge transparency in catastrophe modeling, the changing attitudes surrounding model outputs and the accuracy and extent of analysis models provide.
An article focusing on the cost of damage caused by Superstorm Sandy features Karen Clark's comments on the limited efficacy of catastrophe models applied to a single storm.
An article reports the Association of Bermuda Insurers and Reinsurers expects global insurers to cover half the losses from Hurricane Sandy. ABIR spokesperson Brad Kading cites Karen Clark & Company’s study of historical hurricanes in finding the United States can expect insured losses an average of $10 billion from a hurricane every four years.
Karen Clark authors an article in the inaugural issue of Carrier Management, a publication providing critical information for P/C insurance company executives and directors. Ms. Clark describes the state of catastrophe risk management technology and the value of open platforms for providing executives with a sophisticated, open, and robust basis for analysis.
An article explores the data available to catastrophe modelers and risk managers following Hurricane Sandy may aid modeling future perils for the Northeast United States. Karen Clark advocates insurers' active engagement in the risk management, particularly to address complex covers such as business interruption.
An article describing insurers' strategies to develop effective enterprise risk management frameworks features the benefits of RiskInsight, a platform developed by Karen Clark & Company to provide a more comprehensive, stable and transparent analysis of risk.
A series of articles reviewing insurance trends in 2012 places Superstorm Sandy and the storm's effects as the top story of the year. Research on insured wind losses, conducted by Karen Clark & Company, are included.
An article disseminates findings by Karen Clark & Company's research on U.S. property insurance, showing U.S. vulnerability to hurricanes and coastal hazards continues to rise as property values increasingly concentrate on the Atlantic and Gulf coasts.
An article from the Bermudan insurance news outlet Artemis reports on insured exposures research conducted through Karen Clark & Company's RiskInsight platform.
An article reports on Karen Clark & Company's research on U.S. property insurance, showing U.S. vulnerability to hurricanes and coastal hazards continues to rise as property values increasingly concentrate on the Atlantic and Gulf coasts.
An article assessing home damage and recovery on the Jersey Shore following Hurricane Sandy quotes Karen Clark on risk caused by both the severity of storms and the number of structures built in high-risk areas.
An article reports on Karen Clark & Company’s RiskInsight® estimation that insured wind losses due to Superstorm Sandy will be $12 billion, in part due to a large number of small claims.
An article gleans findings from Karen Clark & Company’s post-disaster survey of wind damage caused by Superstorm Sandy, which included finding wind damage well inland and a lack of risk mitigation features in construction.
An article based on Karen Clark & Company’s post-disaster survey of wind damage caused by Superstorm Sandy reports that the storm may cause over one million residential and commercial insurance claims.
An article following Superstorm Sandy assesses a major risk factor surrounding such catastrophic events is the increase of vulnerable property in addition to climate change.
An article written in the wake of Superstorm Sandy explores the insurance business and underwriting practices in risky areas. Karen Clark is quoted on the likelihood of future catastrophic events and the value of property at risk.
A story on NPR Weekend Edition Sunday reports on increasing insured losses in recent natural disasters, including Superstorm Sandy. Karen Clark is quoted on the role of catastrophe modeling and hurricane prediction.
An article reports on Karen Clark & Company’s RiskInsight® estimation that insured wind losses due to Superstorm Sandy will be $12 billion.
An article assessing the risks and costs of rebuilding along the Jersey Shore following Superstorm Sandy. Karen Clark is quoted on the likelihood of similar natural disasters happening in the future.
An article following Superstorm Sandy assesses a major risk factor surrounding such catastrophic events is the increase of vulnerable property in addition to climate change.
An in-depth piece overviews the features of RiskInsight® and the beneficial effect it could have on insurers and reinsurers, and places the platform in the greater context of the current state of catastrophe risk.
An article reports on the launch of Karen Clark & Company's open, global platform for catastrophe risk management, highlighting features that allow users to build a proprietary view of risk.
An article reports on the launch of Karen Clark & Company's open, global platform for catastrophe risk management.
The launch of RiskInsight® forms the basis of an article analyzing the state of catastrophe risk management and the benefits offered by an open platform that helps users build a proprietary view of risk.
In an article that reviews the launch of RiskInsight®, Nathan Golia reports on the impact the open, global platform has on insurers' and reinsurers' risk management and analytics.
Risk & Insurance® announces Glen Daraskevich as a winner of the 2012 Risk Innovator™ Award in the Technology category for leading the development of Characteristic Events (CEs), a tool to assist insurance companies in assessing and managing catastrophe risk.
A report on the development and forecast of Hurricane Isaac analyzes the storm using the KC Wind Damage Scale.
An article reviews the findings of the Historical Hurricanes survey and highlights the damage that could be caused should the 1926 Miami hurricane hit Florida today. Glen Daraskevitch is quoted on the application of historical data to today’s environment.
This article reviews the history of catastrophe modeling in the context of the twentieth anniversary of Hurricane Andrew, a storm that spurred widespread change in the way insurers assess catastrophe risk.
A retrospective of Hurricane Andrew on the twentieth anniversary of the storm analyzes the lasting impact on the industry and quotes Karen Clark on the development of catastrophe modeling.
An article provides an overview on the report "Historical Hurricanes That Would Cause $10 Billion or More of Insured Losses Today" and findings that show of the nearly 180 hurricanes that have hit the country since 1900, 28 would result in $10 billion or more in insured losses in 2012 given the greater number, size and cost of structures in their paths.
An article highlights findings of the report "Historical Hurricanes That Would Cause $10 Billion or More of Insured Losses Today" and quotes Karen Clark and Glen Daraskevitch on the impact of the findings.
PropertyCasualty360 provides an infographic portraying the most costly historical hurricanes, considering insured losses adjusted to 2012 costs, based off a Karen Clark & Company report titled "Historical Hurricanes That Would Cause $10 Billion or More of Insured Losses Today.
An article highlights findings and methodology of the report "Historical Hurricanes That Would Cause $10 Billion or More of Insured Losses Today" and quotes Karen Clark and Glen Daraskevitch on the impact of the findings.An article highlights findings and methodology of the report "Historical Hurricanes That Would Cause $10 Billion or More of Insured Losses Today" and quotes Karen Clark and Glen Daraskevitch on the impact of the findings.
A Q&A interview with Karen Clark delves into the lasting impact of Hurricane Andrew on catastrophe modeling and risk management, including the collection and analysis of loss data.
Karen Clark is honored among figures in the insurance industry described as having fundamentally changed the way the insurance business is conducted described as having fundamentally changed the insurance business. Karen Clark is profiled alongside industry figures such as Peter Lewis of Progressive and Rep. Barney Frank.
An article reviews the impact of catastrophe modelling on the insurance industry and the increasing scepticism of models following drastic shifts in loss estimates in recent years. Karen Clark is quoted on the values and shortcomings of models.
In a two-part series on hurricanes and their impact on South Carolina’s insurance business, Karen Clark explains the function of catastrophe models as a part of effective catastrophe risk management, and their influence on property insurance rates.
In an article that reviews recent difficult years in the insurance industry, Karen Clark comments on "black swan" events occurring in unexpected locations and provides strategies to recognize and prepare for perils in unlikely places.
An interview with Karen Clark discusses effective catastrophe risk management on the part of insurers. The combination of probabilistic and deterministic methods, such as characteristic events, is key to assess risk.
In a guest article, Karen Clark describes an approach to comprehensive risk management though a combination of risk models and characteristic events.
This article explores the benefits to insurance companies in utilizing Characteristic Events as a tool for risk management. John Tierney, Chief Actuary and Senior Vice President of Quincy Mutual Fire Insurance, said, "Catastrophe models are still critical. But this [CEs] makes it more transparent for the board. It also helped us resolve differences and focused the results from our models.
A profile of Karen Clark & Co. highlights the firm’s work as an unbiased, independent catastrophe risk expert, developing tools that help businesses tackle the issues of managing CAT risk.
In an article reporting on early forecasts for hurricane season, Karen Clark articulates that rare, catastrophic events may occur even in low frequency years and utilizing Characteristic Events methodology may reveal risk exposure across seasons and regions.
In this article, Karen Clark describes the application of Characteristic Events as a common currency and consistent yardstick that help companies make informed and transparent decisions on risk.
An article describes the methodology and benefits of utilizing Characteristic Events to effectively manage risk.
An article describes the methodology and benefits of utilizing Characteristic Events to effectively manage risk.
An article describes the methodology and benefits of utilizing Characteristic Events to effectively manage risk.
In a guest article, Karen Clark describes the impact of ‘black swan’ catastrophes on risk management and presents a new methodology in Characteristic Events analysis, through which insurance companies can better prepare themselves for rare, unexpected risks.
An op-ed by the director of the University of Louisiana–Monroe’s Risk Management and Insurance Studies Program critiques insurance companies' rate-setting methods and quotes Karen Clark's observations on the RMS V 11 model.
An article reporting from the New Jersey Commissioner's Insurance Symposium discusses the state's plans for public-private cooperation following a potential catastrophe and quotes participant Karen Clark on managing risk and preparing for recovery.
An article reporting from a panel at the International Underwriting Association's Catastrophe Modeling Conference relays the differing opinions on uses of models for insurers and reinsurers. Karen Clark is quoted from the panel advocating the use of models as one of several tools in evaluating risk.
Karen Clark evaluates the variations in risk modelers’ loss estimates following Hurricane Irene and provides data gleaned from RiskInsight®, a loss assessment tool developed by Karen Clark & Company.
During coverage of Hurricane Irene, Karen Clark discusses the potential effects and insurance losses associated with winds and storm surge with anchor Thomas Roberts.
An article highlighting data analysis following the Tohoku Earthquake assesses the uses and limitations of catastrophe models, quoting Karen Clark on the use of loss estimates.
In a bylined article, Karen Clark calls attention to a few of the limitations of using solely cat models for loss estimates, and presents an alternative through the use of characteristic events to represent risk with <1% probabilities.
In a bylined article, Karen Clark argues model updates are not an automatic improvement on previous editions and should be evaluated on reduced volatility and variability in loss estimates.
An article reviewing reinsurers' practices of diversifying books of business quotes Karen Clark where the theory and reality of spreading risk diverges in practice.
A profile of the late Bill Riker names him one of the Top 10 Innovators of the past decade for his work with catastrophe models.
A profile of Karen Clark and Karen Clark & Company describes the origins of catastrophe modeling, the eventual over-reliance on models by rating agencies and directions for the future such as monitoring model changes relative to characteristic set events.
In a bylined article, Karen Clark documents ratings agencies' inconsistent catastrophe risk analysis and advocates independent checks on exposure-data quality, such as consistent and transparent benchmarked scenarios.
An article exploring the use of catastrophe models following the Tohoku Earthquake quotes Karen Clark on possible over-calibration of models following the event.
Karen Clark is ranked #14 of the top thirty most influential people in the insurance and reinsurance industry of the past thirty years, ranked by the editors of Reactions in honor of the publication's 30th anniversary.
Karen Clark is featured in a podcast interview describing the current use of models in the property insurance industry, including the inexact nature of models and suggests transparent industry-wide benchmarking.
This article describes Karen Clark & Company's Executive Briefings, offered to US insurance company executives making decisions on implementing revised hurricane models.
In an article describing the current use of models in the property insurance industry, Karen Clark is quoted on the inexact nature of models and suggests transparent industry-wide benchmarking.
In an article describing RMS model revisions, Karen Clark is quoted on the effects model revisions have on the primary insurance and reinsurance markets.
In a bylined article, Karen Clark describes how developments in consumer communications technology open new distribution and growth opportunities in homeowners insurance.
This article reviews the uncertain performance of catastrophe models compared to the active 2010 hurricane season in light of the third annual Near Term Model Report by Karen Clark & Company.
An article discusses the Third Annual Near-Term Model Report's findings, places near- and long-term models in context, and discusses the possible effect of climate change on models. Karen Clark is quoted on the challenges of catastrophe models accurately predicting losses.
An article providing a comprehensive overview and summary of the Third Annual Near-Term Model Report discusses the Hurricane Frequency Paradox and reinforces the lack of connectivity between increased losses and frequency of storms. Karen Clark is quoted on the lack of connection between increased losses and frequency of storms.
An article covering a presentation by Jacqueline Friedland, actuarial practice leader at KPMG's Canadian insurance practice, reviews the findings of a forthcoming study that suggests insurers are over-relying on catastrophe modeling. Friedland cites Karen Clark during a presentation on the study's findings.
An editorial by Michael Loney responds to recent coverage of insurance modeling in the Sarasota Herald-Tribune and acknowledges the industry's over-reliance on models. He quotes Karen Clark expressing concerns over the oversold precision of model numbers.
An article, the second in a two-part series, continues exploring the Florida property insurance business. Karen Clark is quoted on catastrophe models' relation to accurate and precise loss estimates.
An article, the first in a two-part series, reviews the redevelopment of hurricane and catastrophic risk undertaken by the insurance industry after Hurricane Katrina. Karen Clark is quoted on the useful, but limited nature of catastrophe models in a complex system.
A report of Karen Clark’s presentation on Sept. 29 Reactions’ Risk & Capital Management conference in New York reviews her position that climate change affects the severity, though not frequency, of hurricanes making landfall in the US.
This opinion piece by Karen Clark argues inherent flaws in PMLs hampers effective catastrophe risk management and advocates for fixed event sets similar to Lloyd’s Realistic Disaster Scenarios.
This profile examines Karen Clark’s pivotal role as a pioneer, and continuing innovator, in catastrophe risk management.
In this contributed article, Karen Clark discusses hurricane forecasts for the 2010 season, and the limitations of models in accurately forecasting hurricane activity and insured losses.
In this BestDay Audio podcast, Karen Clark discusses how Hurricane Katrina impacted catastrophe modeling and how insurers assess risk since the storm.
In this opinion piece, Karen Clark discusses the increased use of catastrophe models by the insurance industry over the last 25 years. Ms. Clark discusses the need to find balance between utilizing the models as a valuable framework and being able to improve loss estimates utilizing other credible information.
Karen Clark & Company Senior Vice President John Tierney discusses the need for insurers to do a better job of integrating the catastrophe modeling process into their operations.
In this profile of Karen Clark, a former Business Insurance Women to Watch honoree, Ms. Clark discusses how Karen Clark & Company assists insurers in improving their exposure data.
In this article, Karen Clark comments on the inherent limits of catastrophe models and cautions against overreliance on the models.
Karen Clark and others share their perspectives on insurers’ use of catastrophe models. Ms. Clark expresses her concern that "model precision can be confused with accuracy.
In this article on new earthquake models, Karen Clark comments on the inherent limitations of catastrophe modeling software.
In this BestDay Audio podcast, Karen Clark discusses why insurers rely too heavily on catastrophe models and often put too much weight on the probable maximum loss (PML).
Karen Clark comments extensively on the appropriate use of catastrophe models and the perils of selecting a specific point estimate of loss such as the PML.
In this opinion piece, A.M. Best senior associate editor Meg Green cites Karen Clark, "the mother of catastrophe modeling," and her caution on overreliance on catastrophe models.
Karen Clark speaks with Reactions about the findings of the firm’s report on the performance of near term hurricane models and their appropriate role in gauging catastrophe risk.
An abridged version of the Karen Clark & Company report "Near Term Models: How Have They Performed?" is featured in Risk Management’s June 2009 issue, page 22.
This article details the findings of a report by Karen Clark & Company on the performance of near term hurricane models and quotes Karen Clark on the implications for the insurance industry.
In this article on the active 2008 hurricane season, Karen Clark discusses how the insured losses predicted by near term hurricane models compare to actual losses over the past three years.
This article discusses how risk managers can move beyond models to better assess their property risk. Karen Clark says that model results should be supplemented by inspection reports and data detailing specific characteristics of the insured property.
This article by Karen Clark describes the devastating impact of the 1938 hurricane on New England and projects the losses a similar storm today could incur.
In this E-Fusion Conference webinar, Senior Vice President Glen Daraskevich presents on how insurance companies can leverage mobile technology to improve underwriting decision making for the property lines of business.
As part of A.M. Best Company's 2008 E-Fusion Conference, Karen Clark & Company participates in this Q & A podcast on how insurers can better prepare for and deal with catastrophes.
In this article marking the 70th anniversary of The Great New England Hurricane of 1938, Karen Clark is quoted on the devastation a similar storm today would bring to the region.
In this televised segment that aired during WBZ-TV’s Hurricane Week, Karen Clark speaks with meteorologist Mish Michaels about the likelihood and impact of a severe storm striking Massachusetts.
Risk & Insurance® announces Karen Clark as a winner of the 2008 Risk Innovator™ Award in the Insurance category for her outstanding integrity and her ability to address risk-related problems through unique, innovative solutions.
Karen Clark is named the most influential woman in the reinsurance sector for her notable accomplishments in this male-dominated industry.
In this transcript of a Q&A podcast, Karen Clark speaks with Business Insurance about the limitations of catastrophe models, the quality and range of model input data, and the future of the risk assessment industry.
Over the past twenty years, catastrophe models have become a mainstay of the insurance industry. This article quotes Karen Clark on the appropriate role and application of these models in assessing and managing risk.
This article details the efforts that Rhode Island is taking to prepare for a major storm and quotes Karen Clark on the devastating impact a hurricane like Katrina would have on the region’s property and infrastructure.
Major hurricanes in the Northeastern U.S. are rare but can have a devastating effect on people and property, especially when hurricane warnings are disregarded. Karen Clark is quoted on the property damage a hurricane like the Great Hurricane of 1938 would incur in New England.
This article by Karen Clark discusses ways that companies can mitigate risk by applying benchmarking analyses that test the credibility of model output.
In this interview with Insurance Day, Karen Clark offers commentary on how catastrophe risk assessment can be improved by using catastrophe models in conjunction with quality exposure data, a process for checking model output, and other information on losses not covered by the model.
This article covering the Tenth Annual Insurance Forum in Dublin cites Karen Clark’s remarks during her participation in a panel discussion titled “Global Warming—Mitigation or Devastation.
Karen Clark addresses the inconsistency among results produced by existing catastrophe models and suggests that companies use benchmarking and scenario analysis to bring more transparency to these results.
This article announces that Karen Clark & Co. will provide reviews of internal catastrophe risk assessment to help companies conform to best practices.
This article details Karen Clark’s receipt of The Review Worldwide Reinsurance Awards’ Lifetime Achievement award for her outstanding contributions to the reinsurance industry.
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