Praedicat, the liability emerging risk analytics company, has launched a new probabilistic casualty catastrophe model called Nekomodel X to help facilitate exposure-based pricing and reserving for insurers.
Nekomodel X is designed to expand on the underwriting applications of previous model releases, incorporating data on exposure to emerging risks to help drive sustainably profitable business for general liability insurance.
It employs natural language processing and machine learning to connect 128,000 companies, their products, and their business activities to scientific literature that investigates whether these products and activities have the potential to cause bodily injury or environmental harm.
“Nekomodel X’s mass litigation model better reflects the behavior of a plaintiffs’ bar with unprecedented access to capital,” said David Loughran, Praedicat’s Senior Vice President of Product & Chief Economist.
“We have captured the impact of the current environment where plaintiffs’ attorneys have sufficient capital to experiment with new theories of causality and can afford sustained litigation based on those theories. No underwriter should accept a risk exposed to U.S. tort law without first checking its exposure to the more than 240 distinct casualty risks covered by Nekomodel X.”
Nekomodel X functions for individual risks, and in the aggregate to measure portfolio exposures to specific, named, casualty-insurance-buying corporations.
The model also provides a probabilistic assessment of the time path of future claims, with deterministic liability disaster scenarios providing additional insight into portfolio aggregation risks for both ongoing and emergent litigation events.
“Nekomodel X is the culmination of ten years’ work at Praedicat,” says Praedicat Chief Executive Robert Reville. “It is the foundation of our emerging risk framework that tracks and quantifies latent risks across their lifecycle. It supports the transformation of casualty underwriting into a discipline supported not only by instinct, but also informed by scientific insight and complex data analysis.”
“Most importantly, it expands the forward-looking capabilities to reserving and pricing,” Reville continued. “The growing flow of speculative capital directed at the plaintiffs’ bar to fund science-backed bets on judicial outcomes continues to drive up casualty awards, settlements, and claims. With Nekomodel X, risk carriers have the technology and data to thrive and grow in this environment.”