Models Prior to Loss
Some Definitions
| Event Losses |
A table of all simulated events, with estimates of portfolio loss
amounts, descriptive code for the event, and the annual rate of
the event recurring. Usually sorted by loss amount. |
| Exceeding Probability |
Annual probability of a loss equal, to or exceeding, a
given amount. |
| Return Time |
Period (in years) = 1 / Annual E.P. This does not have an easy
interpretation as a probability. Don’t try! |
Event Loss Table
EP Results
Models Are Very Good at Considering:
- Coverages A and B
- Experimental data from wind tunnel/shake table tests
- Number of major historical events for large geographic regions
(e.g. a state or fault)
- Reconciliation to industry data, such as PCS or Sigma
- 25-year to 75-year return times
Structure Loss vs. Construction Data
Two Houses, Two Fates
Two houses
on Belmont Street in Pensacola had distinctly different fates when Ivan hit. The house on the right was built in 1903 and refurbished. The house on the left is only a few years old.
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