Taming nature with models

Catastrophe risk

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Catastrophe may not deserve such a bad name - at least when it comes to risk modelling. Hurricanes and earthquakes may come out of the blue, but their consequences are more predictable. In fact, the modelling of natural catastrophe risk exposures is now as scientific and sophisticated as any area of risk faced by the insurance industry.But as with market, credit and other risks, models are only part of the process of calculating exposures, pricing, allocating capital and making decisions on