EQECAT Inc. has been awarded a contract to develop the earthquake loss costs for the Workers’ Compensation Insurance Rating Bureau (WCIRB) of California. The loss costs are to be incorporated into their rate filing later this year.
EQECAT, an ABS Consulting company, provides insurers with a way to quantify and manage their risk more accurately. EQECAT was selected because of their model and demonstrated success in numerous rate filings and securitizations. EQECAT’s earthquake model passed public and scientific review during the CEA rate filing process. The earthquake model was reviewed by USGS, CDMG, several intervenor groups and independent engineering organizations under the supervision of an Administrative Law Judge of the State of California and was declared “State of the Art.”
“This was one of the most important reasons why we selected EQECAT,” David Bellusci, senior VP and actuary of WCIRB, commented. “We knew that their model had passed extremely rigorous independent reviews and that gave us a strong feeling of confidence in the quality of EQECAT’s modeling capabilities.”
The project advances the state-of-the-art for modeling workers’ compensation earthquake losses by integrating a unique set of databases to resolve many of the problems that limited the usefulness of previous modeling efforts. EQECAT leverages a variety of proprietary and publicly available databases to enable improved loss estimates by worker classification. The data used includes building stocks and employment data by ZIP Code, historical earthquake injury rates and historical insurer losses by injury type based upon thousands of workers’ compensation claims.
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