Willis Re has upgraded its approach to catastrophe modelling to help insurers measure and mitigate exposure more accurately.

Under the “dual approach”, the reinsurance broker will enhance and validate current models and build new ones as required.

Willis Re says insurers are under increasing pressure from regulators and ratings agencies to demonstrate a full understanding of their catastrophe risk exposures.

This can be difficult, due to multiple catastrophe models each having a unique methodology and perspective.

Global CEO John Cavanagh says the new approach helps clients establish their own objective view “using what is best for individual needs, not what is simply available off the shelf”.

Head of Model Research and Development Rick Thomas says despite modelling being based on extensive scientific analysis, there have been unexpected shocks when major loss events have occurred.

“In some cases, companies may have been inclined towards an over-reliance on an individual catastrophe model’s output in their decision-making,” he said.

“Now insurers must improve their own analytical capabilities to truly understand the models they use to quantify and communicate the risk in their portfolios.”