On a commercial property account with catastrophe exposure, the model report often becomes the center of the conversation. Underwriters lean on it to decide capacity, pricing, and attachment. Clients look to it when choosing a limit, and because it arrives as clean figures, they can easily treat them as settled. But it’s not that simple.
In one example, a retail location in Hayward, California, was run seven times with different construction, year-built, and height details. The 500-year loss estimates ranged from about $4.9 million to $7.1 million. Each run described the same building; only the details changed. A swing of more than $2 million can shift a limit recommendation or an underwriter’s view of the account. So, for CAT modeling to work for insurance agents, checking the data and interpreting the results matters as much as the model.
Why commercial property catastrophe modeling starts with the data
Commercial property catastrophe modeling simulates thousands of possible events, such as hurricanes and earthquakes, and estimates the damage each would cause to specific buildings. The results show how large a loss could get in a given event, such as one expected about in a 250- or 500-year return period, as the National Association of Insurance Commissioners (NAIC) explains. That figure is a statistical estimate, so it cannot say when the next storm or earthquake will hit. The software itself is widely available. What sets one analysis apart is the information fed into it.
It rests on six primary data points: address, construction type, occupancy, year built, number of stories, and values. When those are wrong or missing, the model falls back on assumptions. So experienced modelers read a schedule for plausibility first.
Bruce Norris, a Certified Catastrophe Modeler at Jencap, recalls a submission listing a 1998 14-story unreinforced masonry building in downtown San Francisco—an implausible combination that warranted checking. Tools like ZestyAI can sometimes fill in missing details such as year built.
Agents can speed things up with a clean schedule:
- Always send an Excel file rather than an ACORD application or PDF
- Use one line per structure, breaking out values when construction, age, or height differs
- Describe similar buildings the same way every time (Tilt-up, T/U, T-Up – standardize it!)
- List business income and contents separately instead of marking them “Included”
Reviewing results and preparing for underwriters
Results get a second look before reaching the retail broker. Does the loss picture fit these buildings? Is one location skewing it? CAT modeling deductible analysis then lets the team compare options side by side: 2% against 7.5%, a flat dollar amount, or a capped percentage. Jencap’s modelers also review the account like an underwriter, anticipating pricing concerns and where natural breaks between layers may fall.
On one Real Estate Investment Trust (REIT) account valued at roughly $13 billion to $14 billion, a couple underwriters said they could not write it. Jencap worked with the carriers’ modeling teams, found incorrect inputs, and once the data was fixed, capacity became available. No analysis can promise a price or attachment point, but well-supported data gives everyone the same starting point.
Helping clients set limits and decide what to retain
Modeled losses are one input for limits. Others worth raising with clients:
- Fiduciary duty, especially for REITs managing investor assets
- Lender requirements, which a model can help test for reasonableness
- Risk tolerance and cash reserves, including whether the company could absorb a given loss
- Critical facilities and business interruption that property estimates may not fully capture
Sometimes the answer is mitigation. Jencap once helped a financial services firm, whose data center outage would have meant serious business income losses, find a backup site outside the primary facility’s hazard zones. No policy came out of that work.
What Jencap catastrophe modeling adds to an account
Strong catastrophe modeling services for insurance brokers come down to experience and attention. Jencap’s modelers bring decades of combined experience, review data before it goes in and results before they go out, and stay available to walk agents and insureds through findings. “We’re not just going to throw a model out there and check the box,” Norris says. “We want it to be a meaningful result.”
FAQs
How does Jencap help insurance agents with CAT modeling?
Jencap’s property team reviews submitted data, runs and checks the models, and explains the results, including deductible and limit comparisons.
What property data do insurance agents need for catastrophe modeling?
Address, construction type, occupancy, year built, stories, and replacement cost values, one line per structure. Documented secondary details, like a seismic retrofit, can refine estimates.
How can CAT modeling help agents evaluate property deductibles and limits?
Modeling an account at several deductible levels shows how much loss the insured would retain under each, which helps frame limit decisions alongside lender requirements.
Which catastrophe models and property risk tools does Jencap use?
Moody’s RMS for earthquake, hurricane, severe convective storm, and wildfire. AIR (Verisk) includes the same perils as RMS, but adds winter storm, precipitation flood, and inland flood. ZestyAI and RiskMeter supply property-level wildfire information, which differs from portfolio loss estimates.
What are the limitations of CAT modeling for commercial property accounts?
Results depend on data quality, and different models can disagree. Hurricane and earthquake models are the most established. Wildfire and flood models are still maturing, and flood details like basement equipment are rarely recorded.
Have a CAT-exposed schedule heading to market?
Jencap’s property team can review the schedule, model the account, compare limit and deductible options with you, and help explain the results to your insured. Send your next schedule to the property team before it goes to market.
