Catastrophe Models

Catastrophe models are tools used to assess the financial impact of large-scale disasters, such as earthquakes, hurricanes, or floods. These models analyze historical data, natural events, and vulnerabilities to predict potential damages and losses. Insurers and companies use them to estimate risk and set premiums for coverage. By simulating various disaster scenarios, catastrophe models help decision-makers understand potential consequences, prepare better, and allocate resources effectively. In essence, they enable better planning and risk management in the face of unpredictable natural events.