This report presents a new approach designed by liability catastrophe modelling company Praedicat Inc., and helps insurers tackle the four key challenges associated with understanding emerging liability risks:
• Identification: recognising an emerging risk before it manifests as a loss or claim.
• Contextualisation: comparing the size of risks, both relative to other emerging risks and to previous risks.
• Projection: converting an emerging risk from the context in which it is identified, such as scientific literature, into an exposure-relevant context, such as companies and portfolios.
• Quantification: estimating the expected loss from an emerging risk.