Executive Briefings
Directors of companies exposed to catastrophes need independent information about catastrophe risk and best practices for managing that risk because every year the financial exposure to catastrophe loss increases. Karen Clark & Company executive briefings inform those responsible for the financial well-being of the company on the critical issues surrounding catastrophe risk, catastrophe models, and using catastrophe model results to manage risk.
Hurricane Katrina and the past few hurricane seasons surprised most companies even though many of these companies were actively monitoring and managing their catastrophe exposures through the use of the most sophisticated catastrophe models. It is now widely recognized that catastrophe models alone are not sufficient for a best of breed risk management program.
Karen Clark & Company executive briefings illustrate how directors of companies exposed to catastrophe losses can help ensure these companies are effectively assessing and managing their loss potential beyond simply using models. They highlight the key questions the board should ask about the catastrophe risk management process. These questions are designed to bring more transparency to the process, particularly with respect to large loss scenarios, estimated PMLs, and other measures of the company's exposure to future catastrophes. The executive briefings help you better understand the catastrophe model output and how both the input and output can be tested using independent benchmarks.
No place in the U.S. is entirely free of catastrophe risk and the risk increases every year. Karen Clark & Company executive briefings provide directors with timely and relevant information on hurricanes and earthquakes, including
- What scientists know and what they don't know about future events
- How scientific knowledge is likely to evolve in the future and how the scientific research and engineering knowledge get embodied into the catastrophe models
- How model results can change significantly even in the absence of actual events
- What this means with respect to relying on catastrophe model results for actual events and for estimating PMLs
While some technical material is presented, the executive briefings are geared to individuals who have no scientific background or direct experience with catastrophe models. Material is discussed at a high level but with specific, realistic illustrations.
Executive briefings are conducted at times and locations of your choice and can be tailored to your specific needs.
For more information please e-mail: info@karenclarkandco.com
Executive Briefing on Northeast Hurricane Risk
The Northeastern U.S. is subject to infrequent, but potentially very damaging hurricanes. Catastrophe models provide widely divergent views about the hurricane loss potential in the Northeast. Some models estimate losses more than 100 percent higher than other models illustrating the high degree of model uncertainty in this region. This uncertainty stems from the fact that recorded meteorological data on hurricanes in this region are sparse.
Companies cannot rely on the catastrophe model output alone to assess and manage the risk in this region. Senior executives and boards of directors of insurance companies with significant Northeast exposures need to better understand the general nature of this risk in order to make sure their companies are making appropriate underwriting and risk management decisions in this region.
The Executive Briefing on Northeast Hurricanes provides company executives and boards of directors with important, high level information in five areas:
- The likelihood of future major hurricane events
- The nature of the damage likely to be caused by these events
- Why the catastrophe model results can differ by more than a factor of two
- Independent information used to benchmark the model results
- Competitive threats and opportunities in this region
This Executive Briefing provides clear and succinct information on what is known about hurricanes in the Northeast. How that information gets incorporated into the catastrophe models is also explained along with why the model results can differ so widely. The briefing also shows how other independent information can be used to benchmark the model results and provide more transparency with respect to a company's likely losses from future hurricane events.
After hurricane Katrina, reinsurance costs rose dramatically for all coastal areas, including Connecticut, Rhode Island and Southeastern Massachusetts—areas that have not been affected by a major hurricane in over 50 years. This caused many insurers to stop writing business in coastal areas and also led to dramatic premium increases for policyholders. Some of the catastrophe models were also changed after Katrina, and these changes led to increases in loss estimates of up to 100 percent or more in Northeastern coastal areas.
Insurance company executives, policyholders and regulators all want answers about why and how this market disruption occurred. This Executive Briefing addresses the specific issues insurance company executives and boards need to know in order to respond effectively to the current market situation.
Karen Clark is a globally recognized authority on hurricane risk, hurricane models, and using scientific information to assess and manage catastrophe loss potential. Over the past few years, she has given dozens of presentations to industry organizations, investor groups and boards of directors. Ms. Clark was recently featured in a History Channel special on Northeast Hurricanes.
This special Executive Briefing is two and one half hours in length and companies can schedule the briefing at times and locations of their choosing. For more information, please e-mail: info@karenclarkandco.com