For CAT modelling there are three main phases:

Phase I: Hazard/Peril Assessment: In this phase, events based on Severity & Probability are defined.
Phase II: Vulnerability Assessment: In this phase, degree of damage to assets and business interruption are estimated.
Phase III: Contract Assessment: Terms and conditions of insurance/reinsurance contracts are overlayed on Vulnerability assessment results and insured losses for various return periods are estimated.

If we look at the past, the largest insured loss event for the Indian Insurance industry has been Mumbai Floods of 2005 (if numbers of all events are inflation adjusted).

Normally, peak events are rarely flood events. They are either Earthquake or Cyclone/Hurricane. Indian Insurance industry has been extremely lucky that when and where past large earthquake/cyclone events occurred, there was not enough infrastructure/assets created, and insurance penetration was very low.

It will be interesting to know as to what the insured loss for the total Indian insurance industry in case of a 250-year return period event could be? For the following peak scenarios:

a) Earthquake with epicenter in Gujarat
b) Earthquake with epicenter in National Capital Region
c) Cyclone with landfall in Tamil Nadu.

I do not have the answer to this question.

If any of you want to hazard a guess, please comment as to which of the above could be the peak event and what is the likely insured loss for the market as a whole for that specific event.

And, how much higher will it be for a 500-year return period event?