Evaluation of Catastrophic Risk System

Understanding the likelihood and trends in the occurrence and severity of natural disasters is an intricate part of insurance risk analytics. In today’s marketplace, the task of quantifying such risks is handled by vendors of catastrophe modeling tools. Due to proprietary, the vendors do not disclose the scientific and technical at sufficient detail for the users (insurance companies) to understand the modeling output thoroughly, such as sensitivity to assumptions, difference among different models, etc. The aim of the proposed research is to provide an independent evaluation on these systems. Relevant data will be collected and advanced actuarial and statistical tools will be used to accomplish this task. Gaining expertise in this area enables Validus to better understanding the risk taking position and hence making prudent business decision. This also increases the competitiveness of the company and is extremely important to a start-up company like Validus.

Faculty Supervisor:

Dr. Tan Ken Seng

Student:

Xiaorong Zou

Partner:

Validus Research Inc.

Discipline:

Statistics / Actuarial sciences

Sector:

Finance, insurance and business

University:

University of Waterloo