## What is a catastrophe model?

We hear this question a lot. A short overview about catastrophe models is given here and here. But -- is there a better way to answer this question than to give you code you can read and think about? There probably is, but then this is how we would have liked to learn about it some time ago. So get your R (plus some libraries) installed and try to figure out what we're doing here. Plus - this is a new version that has some extra code in it.

Needless to say that a catastrophe model from KatRisk is much more complicated and typically involves a multi-disciplinary team working on each of the components for some time. And there are other important features that we haven't included in this example, such as time steps, cross peril correlations, physical modeling, more complicated financial terms, etc.. But if you want to know some basics and if you ever wondered what the following words mean: Return period, exceedance probability, simulation, secondary uncertainty, AEP, OEP, and many others -- then run the code. Download here - it's open source. Improvements welcome.

Needless to say that a catastrophe model from KatRisk is much more complicated and typically involves a multi-disciplinary team working on each of the components for some time. And there are other important features that we haven't included in this example, such as time steps, cross peril correlations, physical modeling, more complicated financial terms, etc.. But if you want to know some basics and if you ever wondered what the following words mean: Return period, exceedance probability, simulation, secondary uncertainty, AEP, OEP, and many others -- then run the code. Download here - it's open source. Improvements welcome.