Cat risk modelling pioneer Karen Clark, founder of KCC, shares her unique insights on the past, present and future of the discipline and its key role for re/insurance.
“We had to spend months explaining how the models worked and why they could trust them.” Karen Clark, founder, KCC.
· Clark, inventor of cat risk modelling, credits “early adopters” in the market for sticking with innovations
· Hurricane Andrew marked “turning point” for industry trust in cat models
· Launch of cat bonds in 1996 paved the way for ILS market to develop
· Transparency of future models to drive greater confidence and usher in “new paradigm”
Industry-wide views on cat risk modelling shifted dramatically after loss figures of more than $13 billion for Hurricane Andrew were proved right. Re/insurers now acknowledge the discipline as a crucial part of business, but Clark has never stopped innovating and is already looking ahead at future cat risk needs.
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