The nineteenth edition of our ‘think’ series has been authored by David McNamara, Head of Catastrophe and Climate Analytics at FloodRe.
'When precision undermines pooling’ explores how advances in catastrophe risk modelling and flood mapping are changing the insurance industry's approach to risk.
The paper argues that while increasingly sophisticated models have improved our understanding of risk, they can also widen protection gaps by making it easier to identify properties perceived as uninsurable. It examines how risk perception, climate change and model uncertainty influence the affordability and availability of insurance.
Read the full piece to discover why uncertainty remains a fundamental part of insurability, and why greater scrutiny of risk models is essential to preserving effective risk sharing in the future.
If you have any questions or would like to contribute to a future ‘think’ piece, please contact the IFoA Policy Team.
