Because of this, Brubaker anticipates a number of revisions to catastrophe models in the next two years. Adjustments for frequency, damageability ratios at lower wind speeds and for select construction types, and a review of demand-surge functions based on season losses, rather than individual occurrences, can be expected, he said.

Brubaker also predicted a greater focus on the quality and completeness of exposure data for catastrophe models in the months to come. “We probably are going to see more effort and discipline about putting together exposure data for catastrophe modeling,” he said.

The effects of last year's unprecedented season on the reinsurance market were relatively slight, according to Thomas Hettinger, managing director of EMB America. In the last nine months, the reinsurance market has reacted differently from the post-hurricane Andrew period. In the past, after an event, the market would harden.

“Actuaries have developed more sophisticated catastrophe modeling techniques that have become core tools for helping companies understand their risks,” said Hettinger.

Last season's four hurricanes have led to a shift away from the traditional approach to buying reinsurance, however. “This opened people's eyes to what could happen,” he said. “In the past, people were not that worried about aggregate events. Now in Florida, many carriers are considering at least what would happen if there were two events.”

Specifically, carriers are looking at what happens when the Florida Hurricane Catastrophe Fund is used up, the speed of payment from the fund, and potential gaps in coverage created due to second events and the timing of payments, he said.

An ongoing process of change and improvement is occurring in catastrophe modeling. Carriers need to use company enterprise risk models, with catastrophe model output as a core component, Hettinger recommended. “Take this as a wake-up call to push modeling to help you,” he said.