September 2014 Bermuda:Re/insurance+ILS 37


catastrophe modelling


releases of modelling platforms. The improved infrastructure also allows for more advanced data quality, geospatial and loss analytics than previously possible.


There’s a lot going on with technology on the user side, too. As computing power increases, so does the sophistication—and footprint—of catastrophe modelling software. So in addition to looking to technology to drive performance improvements, we also need to explore cost-effective solutions for our client companies to deploy, manage and support the new generation of modelling environments—whether that’s investing in on-premises hardware infrastructure, exploring cloud deployment options or some combination of both.


Are insurance and reinsurance companies increasingly looking toward cloud solutions?


The cloud has received a lot of hype over the past few years across many industries. But the reality is that it’s not a one-size-fits-all solution, at least not yet. The flexibility and agility of the cloud are certainly attractive to some companies, and some of AIR’s clients have embraced these solutions and have already adapted their catastrophe modelling workflows.


“Cloud computing has unquestionably opened up


new operational possibilities, but it’s a misconception that


in itself it delivers significant performance improvements in catastrophe modelling.”


Many other insurance and reinsurance companies are hesitant to entrust their data and critical operations to a cloud service provider—in fact, in some countries, regulators forbid it. A July story in the online Wall Street Journal’s Tech section titled Why Big Companies Delay Using the Cloud for Some Applications reports that many companies are not ready to move mission-critical applications to the cloud, a finding that was backed by a recent AIR client survey. In fact, 65 percent of respondents in our survey indicated that their organisation will not be moving its data into the cloud in the near future.


To best serve the current needs of their clients, modelling companies must offer a choice in deployment strategy.


What non-cloud solutions are out there? Cloud computing has unquestionably opened up new operational possibilities, but it’s a misconception that in itself it delivers significant performance improvements in catastrophe modelling. Performance is a result of the platform architecture and the efficiency of the underlying core algorithms.


There are portable and affordable cutting-edge technologies that can enable high performance modelling regardless of whether they are


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