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Yes, if the possibility of the catastrophe is high and affects a major area and not a single entity.
Yes. Underwriting refers to pricing of an insurance risk. Natural catastrophes, can be underwritten basis past data, geographical attributes and topography of a particular region. There is a good possibility that the data is not very credible for certain regions in which case suitable margins may need to be incorporated.
Covering Natural Disasters which is also termed as Act of God perils is a major business of general insurance industry and is definitely underwritten either as part of standard product or as a add on cover. The premium rates, terms and conditions vary depending on the incidence probability and other exposures. However in case mid term inclusion is sought for a specific peril adequate caution and due diligence is excersised before granting the cover.
Yes sure most of insurance classes insure natural perils and rates varies based on insured subject geographical location
No. Can't predict actual but we can minimize the variation with help of Regression Modelling or Using Current Big Data Modelling Technics. Even though Statistics is a just predictor of small data set. but with Big data it is enabling us to track down the Link or Relationship with Incidents. So we can minimize variance of actual and Prediction.
Yes definitely, it depends on the turning period of a specific geographic region (for example- earthquakes in Egypt are likely to occur every 200 years, on the contrary in Japan they occur once a year). It also depends on the estimated maximum loss arisen from the catastrophe event - unless there is a bad luck (example- philippines hurricane in 2013 which was unexpectedly of catastrophic category 5 and it was ranked the strongest one after hurricane camille in 1969)
To set the mentioned guidlines which have been prepared to help the Management of the company to formulate the underwriting procedures and manuals in order to achieve the Underwriting Objectives for each class of insurance.
