The record-breaking 2004 hurricane season led to a much greater focus on aggregate risk, which will prompt changes in catastrophe risk assessment, Randall Brubaker, senior vice president of Aon Corp., told attendees at a recent Casualty Actuarial Society meeting.
Brubaker noted that companies buying reinsurance are much more interested in understanding aggregate probable maximum losses than they were before. Up until last year, most of the hurricanes were missing the United States coastline, but a shift in the upper atmospheric weather patterns resulted in above-average U.S. landfalls.
“Last year, we had a ridge of high pressure in the East that caused the hurricanes to get pulled further west into the Caribbean before turning north,” he said. “That's what caused them to converge on Florida.” The question, he continued, is whether this is a trend. “Is this going to continue and be something that we're going to see several seasons in succession? I don't think anybody knows that; at least if they do, they aren't saying anything.”
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