Understanding Uncertainty In Catastrophe Modelling For Non-Catastrophe Modellers
This is a really excellent document for introducing the complex subject of catastrophe modelling, for non-catastophe modellers. The following is taken from the introduction.
The LMA Exposure Management Working Group (EMWG) was formed to look after the interests of catastrophe (‘cat’) modellers working in the Lloyd's market. Given the increasing use of cat models in the market in recent years and their perceived complexity and sophistication, the EMWG agreed that it would be useful to put together simple guides for colleagues not working on cat modelling.
In June 2013 the EMWG published ‘Catastrophe Modelling Guidance for Non-Catastrophe Modellers’, aiming to provide some of the background information as to what a cat model is, explain the terminology frequently used by modellers, and answer many of the frequently asked questions on cat models.
The aim of this latest guide is to focus on the subject of uncertainty in cat modelling, to clarify what is meant in this context, identify potential sources of uncertainty, what impact this may have on decision making and how they may be managed. This document is not intended to be a comprehensive guide to uncertainty or to answer all questions on this subject. It will hopefully provide non-cat modellers with a basic understanding of the subject, and also act as a quick reference document on uncertainty in cat modelling.
You can access the guide here.