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Old 08-13-2019, 02:52 PM
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One other thing you might consider that's not mentioned: modeled vs non-modeled cats. You will want to be able to separately identify losses on modeled perils from those on non-modeled perils.
Certainly review and utilize ASOP 39
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Old 08-13-2019, 03:02 PM
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A dollar amount seems pretty arbitrary. $25 million in damages in a suburban residential area in the Midwest is a lot different than $25m in damages in Manhattan.
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Old 08-13-2019, 04:15 PM
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A dollar amount seems pretty arbitrary. $25 million in damages in a suburban residential area in the Midwest is a lot different than $25m in damages in Manhattan.
That's part of the reason for the second part of the definition: "...and affect a significant number of insurers and insureds".

Yes, that still does potentially mean that it takes a less-strong/smaller storm/quake/wildfire/bomb/riot to qualify for a cat in a densely populated area...but that's OK. We're identifying events that are significant to the industry, not how big the storm/quake/wildfire/bomb/riot is.
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Old 08-14-2019, 08:54 AM
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That's part of the reason for the second part of the definition: "...and affect a significant number of insurers and insureds".

Yes, that still does potentially mean that it takes a less-strong/smaller storm/quake/wildfire/bomb/riot to qualify for a cat in a densely populated area...but that's OK. We're identifying events that are significant to the industry, not how big the storm/quake/wildfire/bomb/riot is.
Or significant to a particular company (and its affiliates).

I'm sure that any given event in WI will affect Rural Mutual Insurance Company in a materially different way than it would affect Allstate, even if the dollars and claim count for the latter is much higher than the former.
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Old 08-14-2019, 09:17 AM
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Or significant to a particular company (and its affiliates).
True. My comment was more addressed to the idea of having an industry-standard cat designation system, like we have in the US, rather than the company-centric concept of "catastrophe" requiring special treatment in pricing analyses.

On that latter point, I have worked at companies / with programs in the US where there was an adjustment made to account for company-specific events that didn't reach the level of an industry cat. (E.g., a farm bureau program that writes a number of homes and farms in a rural community that is hit by hail storm. )

I like to call such events "kittens", rather than "cats".


Don't I remember that once upon a time a workers comp occurrence that impacted multiple lives was also considered a "catastrophe"? (As opposed to the concept of "extraordinary loss event" introduced by NCCI, starting with 9/11.)
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Old 08-14-2019, 10:20 AM
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I like to call such events "kittens", rather than "cats".



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Originally Posted by Maphisto's Sidekick View Post
Don't I remember that once upon a time a workers comp occurrence that impacted multiple lives was also considered a "catastrophe"? (As opposed to the concept of "extraordinary loss event" introduced by NCCI, starting with 9/11.)
I've heard the term "shock loss" to describe these sorts of events.
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