Today we have the third part of guest author Nick Lamparelli‘s series on Catastrophe Modeling. Click here for part one and here for part two.

“If you challenge conventional wisdom, you will find ways to do things much better than they are currently done.”
Bill James (author of Baseball Abstracts and Godfather of “ Moneyball”)

In this, my final article on CAT models, I wish to spend some time talking about the output of CAT models, how they are used, interpreted and most importantly misinterpreted. I would also like to inform the reader of the direction this field is headed, and I have added an Additional Resources section for the reader’s further edification.

First, to recap, CAT models are computerized simulations that use scientifically derived physical models to estimate where catastrophic events will occur, how severe they will be, how much damage they will cause to properties…