AM Best Catastrophe

Card Set Information

Author:
ED_6C3
ID:
266999
Filename:
AM Best Catastrophe
Updated:
2014-03-18 20:11:00
Tags:
6C
Folders:
Rating Agencies
Description:
6C
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  1. Keys to strong catastrophe risk management
    • data quality: proper & audited exposure coding, geocoding, current insurance-to-value
    • monitoring exposure: one or more tools, frequently / consistently monitor aggregate
    • controls: establish specific aggregate limits, ensure appropriate reinsurance protection, integrate catastrophe management into UW process
  2. Elements to include in loss estimate
    • demand surge
    • storm surge
    • fire-following earthquakes
    • secondary uncertainty
    • "near-term" event set
    • any material source of catastrophe risk (property structure and contents, flood, …)
  3. Natural catastrophe stress test
    • company’s net exposure is similar after an event
    • add a second net after-tax loss
    • companies are not required to withstand 2 major events
    • can allow capital level to fall below the guidelines - about 30 points below, depends on:
    •    organization’s perceived financial flexibility
    •    historical volatility of balance sheet and operating performance

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