Study Findings from S. Khare et al Broaden Understanding of Earth Science (Modelling clustering of natural hazard phenomena and the effect on…

Study Findings from S. Khare et al Broaden Understanding of Earth Science (Modelling clustering of natural hazard phenomena and the effect on re/insurance loss perspectives)

By a News Reporter-Staff News Editor at Science Letter -- Current study results on Science have been published. According to news reporting originating from Trieste, Italy, by NewsRx correspondents, research stated, "In this paper, we present a conceptual framework for modelling clustered natural hazards that makes use of historical event data as a starting point. We review a methodology for modelling clustered natural hazard processes called Poisson mixtures."

Our news editors obtained a quote from the research, "This methodology is suited to the application we have in mind as it naturally models processes that yield cross-event correlation (unlike homogeneous Poisson models), has a high degree of tunability to the problem at hand and is analytically tractable. Using European windstorm data as an example, we provide evidence that the historical data show strong evidence of clustering. We then develop Poisson and Clustered simulation models for the data, demonstrating clearly the superiority of the Clustered model which we have implemented using the Poisson mixture approach. We then discuss the implications of including clustering in models of prices of catXL contracts, one of the most commonly used mechanisms for transferring risk between primary insurers and reinsurers. This paper provides a number of unique insights into the impact clustering has on modelled catXL contract prices."

According to the news editors, the research concluded: "The simple modelling example in this paper provides a clear and insightful starting point for practitioners tackling more complex natural hazard risk problems."

For more information on this research see: Modelling clustering of natural hazard phenomena and the effect on re/insurance loss perspectives. Natural Hazards and Earth System Sciences, 2015;15(6):1357-1370. Natural Hazards and Earth System Sciences can be contacted at: Copernicus Gesellschaft Mbh, Bahnhofsallee 1E, Gottingen, 37081, Germany. (Copernicus Publications - www.copernicus.org; Natural Hazards and Earth System Sciences - publications.copernicus.org)

The news editors report that additional information may be obtained by contacting S. Khare, Assicuraz Gen, I-34132 Trieste, Italy. Additional authors for this research include A. Bonazzi, C. Mitas and S. Jewson (see also Science).

Keywords for this news article include: Italy, Europe, Trieste, Science

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