Complex Catastrophe Analytics Made Simple
Deepak Badoni Explains How Modern Tech Platforms Simplify Catastrophe Risk Analysis for Underwriters
Shortly after Hurricane Beryl became the first major storm to make landfall in what has been predicted to be an above-average Atlantic Hurricane season, Instech’s Matthew Grant interviewed Deepak Badoni, president and co-founder, EigenRisk, Inc., on how technology platforms are simplifying catastrophe risk analysis for underwriters.
In sharing his journey of founding EigenRisk Inc. a decade ago, Badoni recalled the challenges of building a one-stop platform for catastrophe risk analytics. He emphasized the value of bringing simplicity to complex modelling, as well as offering a platform that combines analytics with a choice of different modeling solutions.
“We need to go back to the difference between modelling and analytics,” Badoni said. “For some people, the word modelling is synonymous with everything you need to know to make decisions about catastrophic risk is in the models. And that’s because it comes from the pricing mindset.”
“But there are these other applications where either the models are not sufficient or not appropriate,” he continued. “So, we talk about exposure management, we talk about event response where these models are designed to work much better in the aggregate across large numbers of simulations.
“When there’s a real event if you try to use the same models, you’re just not going to get a particularly valid answer. People who are familiar with the limitations of the models know that. So, they know that’s why you need in some sense simpler tools – no modeling just simple exposure analytic. Understand what you have before you model it.
“That’s an area where I think there’s much more realization that you need analytics platforms and then you also need the model that complements it,” he concluded.
Badoni also cited the growing preference among insurers and reinsurers for buying technology solutions over building them in-house. EigenRisk offers a one stop shop platform for the insurance industry to bring all the catastrophe risk analytics in one place.
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