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Not too long ago, a phone was just a phone. Along with a phone, you needed an alarm clock, a calculator, a CD player, a camera and many other electronic devices. Today, all of those capabilities and a lot more likely are included in your one compact smartphone.

Executive Summary

Since catastrophe models estimate losses for thousands of hypothetical events, they also should be able to estimate losses for real ongoing events as they are happening, suggests catastrophe risk expert Karen Clark. Drawing an analogy to the capabilities of today's smartphones, she notes that insurers now have options to upgrade from traditional landline-type cat models, which may lack real-time information, visualization and exposure management tools, to smarter application-rich modeling platforms.

Likewise, with catastrophe modeling, the major vendor models are just models. Along with the cat models, you need mapping, exposure management metrics, real-time capabilities, visualization and other tools for effective cat risk management.

Now you can upgrade from a traditional landline-type cat model to an application-rich modeling platform. As with your smartphone, the newer cat modeling platforms are much more efficient and save a lot of time and money. They also provide powerful applications not available with the other models.

What You Can Do With a Cat Model

The traditional cat models are designed to do one thing: read in exposure data and generate loss estimates. The models have become more complex and detailed over time, but they still perform one function: generating the Exceedence Probability (EP) curves (indicating the probability that losses will exceed various dollar values) and associated metrics. (An illustration of an EP curve is presented in another article by Karen Clark, “What Harvey and Irma Say About the Accuracy of Catastrophe Models” at

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