Special Lecture: A Discussion about Catastrophic Risk
Join Dr. Randy Dumm for this special lecture and learn about catastrophic risk related to natural and man-made disasters.
While the concept of insurance is often thought of in terms of insuring assets (e.g., buildings) against loss from a variety of perils, insurance in a broader sense protects individuals or businesses against loss of wealth. Insurance theory suggests that insurance is a suitable risk management approach for losses that occur infrequently but have the potential to be large in size ("catastrophic") to the individual or business. Insurance market disruptions and dysfunctions occur when the risk has the potential to be catastrophic to both the purchasers of insurance and to insurers operating in the marketplace. Prior to Hurricane Katrina in the United States, the largest hurricane loss in the United States was from Hurricane Andrew in Florida in 1992. This event resulted in significant market failures and market disruptions in terms of coverage availability and pricing. The Tōhoku earthquake and tsunami in 2011 is another example a catastrophic loss with far-reaching impact.
Examples of catastrophic risk include those related to natural disasters (hurricane, typhoon, flood, earthquake, tsunami, wildfire, pandemics) and man-made (terrorism, cyber). Climate change suggests an increase in severity of losses from weather-related catastrophes. Cyber risk trends reflect a world that is increasingly interconnected and reliant on technology. And, unfortunately, concerns about large scale terrorist events have not diminished. This presentation will provide a better understanding of the process of modeling catastrophic risk: why catastrophe models are used, how catastrophic risk is modeled, who provides catastrophe modeling services, and how catastrophic risk impacts insurance markets and affects asset pricing. In addition to providing an overview of catastrophic risk types, the presentation will
- provide an overview of hurricane/typhoon and earthquake risk and how these risks are modeled
- discuss the importance of mitigation and building codes in markets exposed to catastrophic risk
- discuss how catastrophic risk impacts insurance markets, insurance prices and consumer pricing decisions
- discuss cyber risk trends and the challenges of modeling this risk
About the Instructor
Randy E. Dumm, Ph.D.
Professor, Temple University
Dr. Randy E. Dumm is a Professor in the Department of Risk, Insurance, & Healthcare Management at Temple University where he supports the program’s research and expansion efforts and teaches courses in insurer operations and international risk management.
He is a member of the Risk Theory Society and has been a visiting professor at Ludwigs Maximilian University, Hannover-Leibnitz University, Fudan University, Krems University of Applied Science. He also taught at the Vienna University of Economics and Business in 2004 as a Fulbright Scholar.
Dr. Dumm's research interests include catastrophic risk, insurer capital structure, insurer distribution channels, demand for insurance, and insurance product performance.
Education: Ph.D., University of Georgia