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Move To Seasonal Deductibles Does Not Create Uniform Increase In AAL, EQECAT Says
New York, New York, May 19, 2005
Contrary to views held by some, a review by EQECAT Inc., the authority on extreme risk modeling, shows that the relative increase in Average Annual Loss (AAL) by moving to seasonal deductibles from occurrence deductibles is not uniform in Florida.
An insurance company applying a single factor statewide might be overcharging in some areas, and undercharging in others, Tom Larsen, senior vice president, and David F. Smith, director of EQECAT’s Research Group, said at the Regional 2005 Catastrophe Management Client-Meeting, in New York City, which began Wednesday.
The greatest proportional increases in AAL are in south Florida, away from the coast. “The greatest increases are in areas exposed to high frequency of losses, but a relatively low expected severity of loss from a single event,” said Mr. Smith.
EQECAT said it is continuing to study the impact of seasonal deductibles on the exposure carried by insurers and reinsurers.
As announced earlier, starting in May 2005, annual deductibles in Florida, must be specified in policies, according to newly mandated rules.
The two-day conference focuses on “the future of cat modeling;” the benefits of EQECAT’s updated catastrophe models, which are part of its highly regarded WORLDCATenterprise™ platform; and, a variety of other man-made and natural hazards, which are key issues for insurance and reinsurance companies in the United States and abroad.
Additional Regional Client-Meeting Scheduled In Bermuda
EQECAT will hold another regional client-meeting in Bermuda, June 22 - June 23. The previous meeting in the series, in Dublin, Ireland, earlier this month, focused on managing extreme risk in an uncertain world, and the innovative strategies, and solutions available to help insurers improve business results.
For additional information about the Bermuda meeting, please visit www.eqecat.com.
EQECAT Serves Global Clients Through Extensive WORLDCATenterprise™
Through its user-friendly, extreme-risk modeling software, WORLDCATenterprise™, EQECAT enables clients to assess and manage potential damage and loss from wind, earthquakes, flood, wildfire, and terrorism, among other perils. WORLDCATenterprise™ includes 167 natural hazard software models for 88 countries spanning six continents.
EQECAT, and its parent ABS Consulting, serve the global property and casualty insurance industry, major multinational corporations and financial institutions. EQECAT is known as the technical leader and innovator in the development of analysis tools and methodologies to quantify insurers and major corporations’ exposure to natural and man-made catastrophic risk.
EQECAT was founded in 1994 and is headquartered in Oakland, California. For additional information, please log on to www.absconsulting.com, or www.EQECAT.com. For more information, contact:
Thomas Larsen
EQECAT, Inc.
1-510-817-3100 | tlarsen@absconsulting.com
Eric R. Samansky
The Samansky Group
1-516-319-0858 | eric@samanskygroup.com
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