Balz Grollimund says natcat models should look at non-physicial damage
14 Jul 2016
The Head Earthquake, Cat Perils and Treaty Centre, Swiss Re co-presented “What current exposure data doesn't tell us" at the Catastrophe Knowledge Exchange event at the Swiss Re Centre for Global Dialogue.
Click here to find out more about the event.
View Balz Grollimund and Mark Weatherhead's presentation slides here
Read the text version of Balz Grollimund’s interview here:
"The insurance industry is ready for another Katrina when it comes to paying out claims. There's certainly a lot of capacity in the market in estimating the claims. I believe there's a lot of experience and capabilities, so I don't have any questions around that. When it comes to modelling effects of a Katrina, I think we've learned storm search was a big effect that came into play in Katrina - that modellers have taken up proactively since then. In the next event, there will be other factors which currently we won't anticipate, and we'll learn from that as well.
Natcat models could definitely be improved by focussing more on the non-physical aspect of the damage. Currently the models look very much at the hazard, the engineering aspect, the vulnerability aspect. Then, what we as an insurance industry are interested in is as well, of course, is how much we have to pay in the end, and often there is a missing gap between those components - so that's something models should focus on more, how do we get people to buy the insurance?
I think one missing piece at the moment is the immediate awareness of homeowners of the value of earthquake insurance. I think everybody living in California is aware of this earthquake risk, but I think most people won't connect it to their house, to their property, and what it could mean for them and how much value an earthquake insurance could give them in the case of an event.
Within Swiss Re, of course, we discuss those kinds of topics here on a daily basis and so I really hope to get some more insights from other parties. That's also why we set up that event to have the scientists, brokers, insurance companies, vendors sit together and hear each other's views on things and see whether there are similarities or whether there's some difference in thoughts, and we can build on that, learn from that."
Click below to read the themes from the first Catastrophe Knowledge Exchange:
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