Fitch Ratings is re-evaluating insurers' use of catastrophic risk models, saying the current programs are inadequate for developing a true picture of a carrier's capital requirements.
Peter Patrino, a member of Fitch's insurance group based in Chicago, said: "The old methods for evaluating catastrophe risk are just that, they have gotten a bit old. The new process and thoughts that Fitch will bring to the evaluation of CAT risk will look at the entire tail of risk distribution and integrate that risk with the insurers' overall capital needs."
The company's comments came today during a telephone press conference to discuss Fitch's special report, "New Thinking on Catastrophic Risk and Capital Requirements."
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