KCC’s modelling platform now generates exceedence probability curves, average annual losses

Karen Clark & Company (KCC) has announced its open platform for catastrophe risk management is now a fully probabilistic loss estimation tool capable of generating exceedence probability (EP) curves, probable maximum losses (PMLs) and average annual losses.

An open platform offers components that “are fully transparent and customizable by the user,” Karen Clark, CEO of KCC, says of RiskInsight. It is “the only modelling platform that gives companies CE (characteristic event) loss estimates for selected return periods — the flip side of what they get from the EP curves,” Clark reports in a statement from KCC, which provides software products and consulting services to help insurance companies manage catastrophe risk.

The platform includes global mapping capabilities, exposure analytics, data scoring and an industry database of detailed property exposures that can be used to estimate industry losses and individual company market shares of loss.

The platform “clearly illustrates our loss potential in two important ways — using the traditional EP curve risk metrics, such as PMLs, along with the newer CE methodology,” Locke Burt, president of Security First Insurance Company, says in the press release.

Being able to see both the probability of exceeding a certain loss threshold and estimated losses from a hazard perspective for 100- and 250-year events “enables us to optimize our portfolio while carefully monitoring our exposure concentrations. This means we are able to maximize profitability and minimize the chances of surprise losses,” Burt reports.

The platform “provides some unique perspectives and information that complement our internal pricing and management analytics,” adds Nicolas Papadopoulo, CEO of Arch Reinsurance. “Our underwriters highly value how RiskInsight illustrates individual company loss potential and the correlations across ceding companies in such a visual and effective way,” Papadopoulo says.

Glen Daraskevich, KCC’s senior vice president, reports that users can build their proprietary views more efficiently and scientifically because they can directly access the assumptions in the modelling platform.

Clark adds the platform allows users to “test and implement new science and data as soon as it’s available. This greatly enhances understanding of the risk and creates significant competitive advantage.”

The platform can be deployed in a variety of configurations, including client-server, private cloud or KCC-hosted.