Incorporating flood/catastrophe models into pricing and underwriting
Research report provides new methodology to assist Canadian actuaries
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Water damage claims and climate-related perils are currently the largest claims costs facing property insurers in Canada. Canadian insurance companies have responded with the development and introduction of flood endorsements for property protection to the market.
Originally published in 2018, this research report can assist Canadian actuaries in developing property insurance pricing methodologies and underwriting approaches that incorporate the use of catastrophe model results. It provides a comprehensive evaluation of different methodologies for incorporating catastrophe modeling into ratemaking and underwriting as well as providing a proof of concept illustration of one potential solution for the industry.
Sponsored by the Canadian Institute of Actuaries, the Casualty Actuarial Society and the Society of Actuaries, the research team included Jim Christie and Stanley Caravaggio of RSM Canada and George Davis, Stacey Gotham and Alan Frith from AIR Worldwide.