More Than One Way To Define A Cat
Friday, September 4th, 2020 CatastropheIf you disagree with a co-worker on exactly what a catastrophe is, both of you could be right. There is no single standard definition of a “Cat,” with the industry’s loss costs — and even media coverage — among the factors that go into deciding whether an event is a Cat.
“We are not all on the same page,” said Glenn McGillivary, managing director of the Institute for Catastrophic Loss Reduction. “Ultimately, what constitutes a catastrophe is in the eyes of the beholder.”
McGillivary was asked about the definition of a Cat during Canadian Underwriter‘s Aug. 27 webinar, Standing on Guard for Thee: Adjusting Canadian NatCats.
For its part, Desjardins Insurance uses three criteria to decide whether an event is a catastrophe, said the carrier’s section manager of property field claims for the Ontario, Atlantic and Western Regions, Fred VanDine.
“We take a look at the event magnitude, we look at our internal capacity, and media coverage. We don’t have a threshold number of claims. It really depends on the three triggers,” said Van Dine. “A Cat is going to be very different to a very large company than to a small or a medium regional player, so we are kind of all over the place,” said McGillivray.
