Reviewed by Apex Insurance Brokers · Last reviewed 2026-06-22
~2 min read
Reviewed by Apex Insurance Brokers · Last reviewed 2026-06-22
Category: Pricing & rating · Reviewed by Amy Price, Account Executive · Last reviewed
A vendor catastrophe model is a commercially-licensed cat modelling product supplied by a third-party software provider for use by insurers, reinsurers and brokers. The dominant vendors are Moody’s RMS, Verisk AIR, CoreLogic and JBA Risk Management (flood specialist).
Strengths
Substantial R&D investment in physical modelling that no individual insurer could replicate.
Periodic recalibration to new science and post-event data.
Multi-region, multi-peril coverage.
Industry-standardisation of methodology, easing cedent-reinsurer comparisons.
Limitations and “model risk”
Different vendors produce materially different loss estimates for the same portfolio and peril — sometimes 30-50% apart.
Vendor model “version churn” (e.g. RMS v17 vs v18 vs v22) requires constant re-pricing.
Vendor models embed assumptions not always transparent to users.
Tail behaviour (>1-in-250 year) is poorly constrained by data.
Use of multiple models
PRA SS18/13 and Lloyd’s catastrophe guidance both expect material catastrophe-exposed (re)insurers to consider multiple vendor views as part of their view-of-risk. Internal model firms must show evidence of:
Our service promise. We acknowledge every quote request the same working day. For straightforward risks, indicative terms typically follow within five working days. Complex risks — higher-risk buildings, cladding, mid-term proposals requiring fresh underwriting — may take longer; we’ll send you a progress note by the end of the fifth working day in those cases.