Interpreting Model Results

Question 1

Used to quantify a complete risk profile for a portfolio or for an individual risk. They provide the probability of experiencing certain levels of financial loss which you then use in determining what amount of risk to keep and how much to cede away

Answer 1

EP curves or return period losses

Question 2

To asses the impact of large loss scenarios on your portfolio

Answer 2

Even level losses

Question 3

Used for ratemaking to determine the cat load by ZIP Code or for planning studies to help you determine the best areas to expand from a cat point of view

Answer 3

Average annual loss

Question 4

Can help in devising underwriting guidelines or for pricing purposes

Answer 4

Location level loss

Question 5

Exceedance probability

Answer 5

Rank divided by number of simulated years

Question 6

EP curve can be

Answer 6

Occurrence
Aggregate

Question 7

Average losses between two exceedance probabilities

Answer 7

WinVaR

Question 8

Take all losses above a certain exceedance probability and set them to the same exceedance probability

Answer 8

CentVaR

Question 9

Average event losses between 1.1% and 0.9% EP instead of 1% EP

Answer 9

Risk managed layer RML