Impact Forecasting has long established itself in catastrophe risk modelling and, in the face of many large-scale challenges in the last 12 months, it has solidified its reputation.

The company aims to assist insurers' analysis of the financial implications of catastrophic events, to help them achieve a greater understanding of the risks.

"Insurers and re/insurers told us that a black-box approach is limiting them from making most of the catastrophe models as the calculation process is not clearly defined and cannot be easily explained to stakeholders, regulators and rating agencies," says Jakub Aska, business development executive at Impact Forecasting.

Its processes have evolved from traditional catastrophe modelling for reinsurance to underwriting, new product development and automated accumulation control.

In 2020, the firm made several improvements including expanding coverage of its windstorm models across Europe to now include Poland, Czech Republic and Slovakia, and enhancements to its Automated Event Response (AER) service for European windstorm and US hurricane perils. The model enhancement provides loss projections for an insurer's portfolio in advance of storm making landfall.

The Atlantic hurricane season in 2020 provided a timely test: a record-breaking 30 named storms formed, some of which made landfall as severe hurricanes.

"Our AER service provided insurers and reinsurers with early estimates of projected losses (even before the storms hit land) for all of them – including hurricane Laura, which was the costliest landfalling hurricane of 2020," says Aska.

"From discussions with clients using the service, we've gathered lots of useful feedback which will enhance future developments. These will include additional parameters to explore hazard uncertainty such as storm track and wind field impacts on projected losses."

In addition, Impact Forecasting incorporated the Oasis financial engine in its ELEMENTS platform. This will allow users a greater choice of models and help re/insurers in defining their own view of risk.

Last November, the firm also established a partnership with Columbia University to investigate how climate change will be considered within its models and how it will impact on future catastrophe losses.

Planned future developments, according to Aska, include new models and updating existing ones, as well as enhancing the functionality of ELEMENTS.

"This year for example, we will introduce new UK freeze, US hurricane, US wildfire or Latin America flood models and update the existing European hail and European windstorm models, among others," says Aska.