Insurance executives are concerned that industry has become too reliant on models, according to reports
Amlin is working with Oxford University on a study of the dangers posed from relying on catastrophe predictions.
The Lloyd’s insurer said the insurance market is vulnerable to scenarios where modelled expectations of risk do not reflect reality, which poses a threat to the business and insurance market as a whole.
Catastrophe models emerged in the 1990s and now play an important role in insurers’ attempts to understand heir exposure losses.
Additionally, they help to determine the level of insurance premiums and the size of the companies’ capital buffers.
But insurance executives are concerned that the industry has become too dependent on the models, according to reports in The FT.
The group’s underwriting officer Simon Beale said the move was an important step in “ensuring that our reliance on the increasing amalgamation of models does not prove catastrophic for the insurance industry”.