Karen Clark & Company Introduces Thinking Outside the Black Box™ Catastrophe Management Operational Review
BOSTON, MA, December 8, 2009
Karen Clark & Company, independent experts in catastrophe risk, catastrophe models, and catastrophe risk management, today announced the introduction of a new service, Thinking Outside the Black Box™ Catastrophe Management Operational Review. The Review provides a comprehensive examination of a company’s use of catastrophe models and the integration of catastrophe loss analytics into risk management operations.
Catastrophe models have become an essential component of the risk management process of most insurers. Many companies, however, don’t fully understand the uncertainty inherent in the models, or how to best utilize the models in light of this uncertainty. The Catastrophe Management Operational Review helps insurers develop better and more holistic risk assessment and risk management processes. It addresses all essential components of sound catastrophe management including data management, catastrophe modeling, underwriting, pricing and risk management.
"Insurers frequently use catastrophe models in isolation to determine probable maximum loss estimates, and model results may not be properly integrated into the operations of the organization,” said John Tierney, Senior Vice President, Karen Clark & Company. “In addition, point estimates from the models are subject to high volatility and instability, making it difficult to develop a robust framework for integrating catastrophe information into risk management decisions. The Catastrophe Management Operational Review enables an insurer to develop a state-of-the-art catastrophe risk management program that is both effective and robust."
Among other benefits, the Review helps insurers determine whether they:
Accurately collect information pertaining to the exposure associated with new business Utilize appropriate and robust analytic tools as applied to their book of business Effectively use underwriting processes to accept business and control aggregate exposure Properly reflect catastrophe exposure in the development of rate indications and rating plans Appropriately reflect catastrophe exposure in determining target levels of profitability
"We are very excited to be providing this new service because the Thinking Outside the Black Box™ Catastrophe Management Operational Review can enhance profitability through pricing and underwriting actions," said Karen Clark, President and CEO of Karen Clark & Company. "It goes well beyond catastrophe modeling and provides information companies can use to accelerate growth while controlling reinsurance costs and maintaining or enhancing financial strength ratings."