One of the shockers for me in attending last week's ACORD London Forum was learning about the lack of standardization when it comes to working with catastrophe models. I was also surprised to hear that many companies work with multiple models to hedge their bets. It sounds like the industry is still dealing more with wishful thinking than hard science when it comes to their biggest exposure.
ACORD has a number of players participating in a standards-setting initiative on catastrophe data, but panelists at last week's forum lamented that not everyone is on board.
“It is very important that all model vendors are in the boat. Not all of them are at this point,” noted Peter Hausmann, head of research and development for catastrophe perils at Swiss Re Group. During an ACORD panel on “Addressing the Challenges of Cat Exposure Reporting,” he added that “with more carriers using multiple models to price their risks, we need data standards to assure we are comparing apples to apples.”
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