Agree about the regulators’ (lack of) abilities. Catastrophe risk models, however, shouldn’t be be lumped together with the types of financial engineering/quan

Agree about the regulators’ (lack of) abilities. Catastrophe risk models, however, shouldn’t be be lumped together with the types of financial engineering/quant models used in capital markets. The latter are generally very theoretical, based on pretty shallow theory and little data. Academia has been spewing out a lot of quant finance models which have little bearing on real market dynamics. Cat risk models, however, are generally more data-driven and rich in terms of science and engineering I.e. understanding of underlying hazard mechanisms. But, like any model, they still are only approximations of reality.