New Findings from CREATE in the Area of Risk Management Described (Improving Catastrophe Modeling for Business Interruption Insurance Needs)

By a News Reporter-Staff News Editor at Insurance Weekly News -- New research on Risk Management is the subject of a report. According to news reporting originating from Los Angeles, California, by VerticalNews correspondents, research stated, "While catastrophe (CAT) modeling of property damage is well developed, modeling of business interruption (BI) lags far behind. One reason is the crude nature of functional relationships in CAT models that translate property damage into BI."

Our news editors obtained a quote from the research from CREATE, "Another is that estimating BI losses is more complicated because it depends greatly on public and private decisions during recovery with respect to resilience tactics that dampen losses by using remaining resources more efficiently to maintain business function and to recover more quickly. This article proposes a framework for improving hazard loss estimation for BI insurance needs. Improved data collection that allows for analysis at the level of individual facilities within a company can improve matching the facilities with the effectiveness of individual forms of resilience, such as accessing inventories, relocating operations, and accelerating repair, and can therefore improve estimation accuracy."

According to the news editors, the research concluded: "We then illustrate the difference this can make in a case study example of losses from a hurricane."

For more information on this research see: Improving Catastrophe Modeling for Business Interruption Insurance Needs. Risk Analysis, 2016;36(10):1896-1915. Risk Analysis can be contacted at: Wiley-Blackwell, 111 River St, Hoboken 07030-5774, NJ, USA. (Wiley-Blackwell - www.wiley.com/; Risk Analysis - onlinelibrary.wiley.com/journal/10.1111/(ISSN)1539-6924)

The news editors report that additional information may be obtained by contacting A. Rose, Univ Southern Calif, CREATE, Los Angeles, CA 90089, United States.

Keywords for this news article include: Los Angeles, California, United States, North and Central America, Risk Management, CREATE.

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