There is a clear need for the market to get a firmer handle on its catastrophe risk exposure. This was the view of James Webb, product manager at EQECAT.

The question for catastrophe model providers is how will they help the market achieve this aim.

Webb says the general consensus in the market is that global warming and climate change are strongly related to the increased risk posed by rising temperatures around the world.

"However, there is a lack of agreement as to the actual degree to which climate change - global warming - will relate to damage onshore. Now this is a problem for catastrophe modelling, which is based on extrapolating past experience and behaviour into the future."

Webb's view is that having listened to the market he is providing two perspectives of risk. "One is long term, which is consistent with our current model, and another near term, which includes modified frequencies for the same events, including also a recent event in 2004.

"These model frequencies were based on the warm event patterns. So,on the one hand we have long term view and an accepted currency within the modelling market, on the other hand we have a near term view, supported by a very strong body of research.

"We believe there's an important need to give the market an understanding of the transition of risk from long term to near term.

"Second, clients are telling us they want to be able to continue their existing risk management procedures and practices, and to be able to evaluate the changes themselves."

While offering an emerging view of risk, wherever appropriate, Webb thinks it is important not to lose site of empirical baseline risk.

"We hope that users will be able to use this improved understanding better in order to sustain the insurance industry in the face of the uncertainty that lies before us."