CAT models can be used to assess the insolvency potential of insurance companies, develop rating and pricing plans, and promote risk reduction (mitigation) in the general population. While CAT models have been readily applied for these purposes in other natural disaster risk domains such as hurricanes and earthquakes, their acceptance and widespread usage for wildfire is in an early stage in the market. 

Working with regulators in CA and OR, the CIPR has partnered with RMS, IBHS, and Firewise on a research project aimed at demonstrating how a catastrophe model can be effectively used by state insurance regulators to have additional insight concerning wildfire catastrophe model output that will help them better prepare for disasters and continue to enrich the insurance markets in their respective states.  Project components and outcomes will be discussed.  Further, the NAIC Catastrophe Insurance (C) Working Group of the NAIC Property and Casualty (C) Committee maintains the NAIC Catastrophe Computer Model Handbook which provides guidance around areas and concepts to consider and explore in order to become well informed about catastrophe computer models.  This session will also explore what an updated CAT computer model handbook should look like specific to wildfire.