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The starting point for AIR's serviced-based clients is a thorough understanding of their current
catastrophe risk profile. Probabilities are estimated for potential levels
of annual aggregate and occurrence losses that a company may experience given
their portfolio of property exposures. The results of a catastrophe risk
assessment also provide the necessary detail to determine those perils, regions,
lines of business, policy forms, etc., that drive the company's large loss
potential, including probable maximum losses (PML).
To ensure the accurate representation of exposure data and therefore the most reliable results, an extensive data review and validation process is performed before the analysis begins. This involves close communication between client and consultant. Exposure data are checked for reasonability and completeness. Missing and erroneous data are revealed. An appropriate course of action is determined jointly and corrections are made based on assumptions regarding industry, company or other information. CLAS™ analyses are customized to help clients manage their exposure to catastrophe risk in light of corporate goals. Analysis results are used to perform sensitivity tests, develop underwriting guidelines, analyze policy conditions, make sound decisions regarding the purchase of reinsurance, estimate consistent loss costs for catastrophe-prone areas, and for overall catastrophe risk management. The detailed information provided enables clients to effectively monitor the impact of natural hazards on all segments of their business.
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