Multiple Models Is The Way Says Eqecat

Insurers and others are increasingly and moving to a multiple-model strategy to handle the current volatile weather environment, according to the president of a catastrophe damage modeling firm.

Rick Clinton, president of Oakland, Calif.-based Eqecat Inc., said this is a wise focus and “a plan we have long suggested.” He said his firm is beefing up model capacities and planning to release a new platform.

Mr. Clinton said his firm has found that in the wake of frequent severe hurricane forecasts for the coming decade in the Atlantic Ocean, Caribbean Sea and Gulf of Mexico, insurers, reinsurers, corporations and government entities are placing increased importance on catastrophic risk models.

Speaking at a recent series of group and one-on-one client meetings, he said, the current severe storm forecast, coming after the industry's difficult 2004 and 2005 hurricane experience, is putting more pressure on companies to improve their understanding of, and to aggressively manage their catastrophe risk.

To criticism by some analysts that risk models in general are neither sophisticated nor accurate enough, Mr. Clinton responded that “there has always been uncertainty in the modeling process, which we quantify and help our clients to understand. Therefore, what companies should be looking at is whether their model provides estimates that fall within an acceptable level of uncertainty.”

“During the past two years the risk perception has changed, and will continue to going forward,” said Mr. Clinton. “As the change in weather cycles evolve, so does the perception of risk, and Eqecat will continue to take into consideration the underlying factors of those risks to enable our clients to manage their exposures.”

Mr. Clinton said his firm is upgrading modeling capabilities and nearing completion of plans for the release of other optimized modeling capabilities, supported by its “WORLDCATenterprise” platform.

The platform deals with several perils, including flood and earthquakes, as well as measuring the impact of perils on the offshore energy industry.

Eqecat enables clients to assess and manage potential damage and loss from wind, earthquakes, flood, wildfire and terrorism, among other perils. WORLDCATenterprise includes 167 natural hazard software models for 88 countries spanning six continents, the company said.

Additional information is available at www.eqecat.com or 510-817-3100.

Eqecat develops and provides analysis tools and methodologies to quantify insurers' and major corporations' exposure to natural and man-made catastrophic risk.