Catastrophe risk modellers Impact Forecasting, AIR, RMS, and CoreLogic will be releasing updates to their existing risk models as well as new sophisticated tools to quantify and manage risks in the Asia region, Aon reported in its 2017 Asia market review.
The updates are expected to lead to an in increase in pressure on adequacy of catastrophe reinsurance purchasing in the region, according to Aon.
Last year, catastrophe modelling company AIR added signi cant updates to their earthquake and typhoon models in South East Asia and new models covering India, Singapore, Malaysia, Thailand, and Vietnam.
The more sophisticated risk assessment tools showed an increase of expected losses when compared with older models; data which was especially evident for Philippines and Taiwan typhoons and Indonesia earthquakes.
These new models have been widely used by insurers operating in Asia to improve analysis of potential financial losses from natural catastrophes, helping reinsurers achieve a better understanding of their risks and more accurate underwriting and pricing strategies.
Of course, improved risk modelling doesn’t always mean prices will go up, as risk commensurate pricing could sometimes lead to lower prices, if the model updates find that events are more rare.
