Insurers rethink catastrophe models as climate volatility and regulation escalate

“We have the ability to stress test how our risk might change in a scenario with increased tropical cyclone activity,” Sharp said. ICAT’s modeling vendor, Verisk, now enables users to simulate how rising sea surface temperatures and intensifying storms might affect exposures. “We can’t predict exactly what’s going to happen in the near to midterm future,” he said, “but if sea surface temperatures continue to rise, what might that mean for our portfolio?” 

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