REPORT: INSURERS CALCULATE PREMIUMS BASED ON HYPED-UP HURRICANE PROJECTIONS
Hurricane risk prediction methods that property insurers use to help calculate premiums were off by $34.8 billion to $53 billion the past five years, according to a new report. "Catastrophe models are relatively blunt tools with many simplifying assumptions based on limited scientific data" wrote Karen Clark, who developed the first hurricane catastrophe model and in 1987 founded the first catastrophe modeling company, Applied Insurance Research, which is now AIR Worldwide.
Julie Patel, Orlando Sentinel 01/21/2011
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