West Coast Insurance writes property and liability insurance in Califo

West Coast Insurance writes property and liability insurance in California, Oregon, and Washington. These states are all susceptible to earthquakes.

To help determine how much reinsurance to purchase, West Coast Insurance hired an organization to use a computer algorithm to estimate what its insured losses would be if a severe earthquake occurred. West Coast Insurance based its purchase of reinsurance on the loss estimates. This scenario illustrates using
A) value-at-risk analysis.
B) catastrophe modeling.
C) risk mapping.
D) a risk management information system.

ANSWER

Answer: B