Karen Clark Urged Investors to Demand New Risk Models
The catastrophe model firm CEO argued that insurance-linked securities investors should require more diverse risk views.
Updated on Oct. 13, 2026 in Investing
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Karen Clark, CEO of catastrophe risk modeling firm Karen Clark & Company, recently called for investors in insurance-linked securities to insist on multiple risk model views within deal documentation. She emphasized that relying on a single primary vendor model limits data and hinders effective capital allocation.
Why it matters
Incorporating alternative catastrophe models provides investors with a broader set of data to evaluate risk. Increasing the use of multiple perspectives in deal documents can reduce uncertainty and introduce necessary competition to the current model landscape.
The firm provides catastrophe risk models for U.S. insurers to assist with internal rate making, pricing, and reinsurance underwriting. While brokers have previously declined requests to include alternative model views, investors continue to seek diverse risk data.
The players
Karen Clark
Karen Clark is the CEO and co-founder of Karen Clark & Company, which specializes in providing catastrophe risk modeling services.
Karen Clark & Company
Karen Clark & Company is a firm that provides catastrophe risk modeling services used by U.S. primary insurers for underwriting and reinsurance.
The details
Clark noted that current deal flow is dominated by primary vendor models, often at the exclusion of other expert inputs. She suggested that investors have the leverage to influence transaction documentation and push for more comprehensive risk assessments in the catastrophe bond market.
Timeline
October 13, 2026: Karen Clark addressed the ILS Bermuda Convergence 2026 conference.
Market Dynamics
This development follows trends discussed at the ILS Bermuda Convergence 2026 conference regarding the evolution of risk transparency. It reflects a broader shift toward greater competition in risk modeling as the capabilities of independent models continue to advance.
For investors in insurance-linked securities, demanding multiple risk models could lead to better-informed capital allocation and potentially reduced exposure to unforeseen losses. This shift may ultimately change how catastrophe bonds are priced and structured in future deals.
The takeaway
Investors looking for more robust risk evaluations should review their current documentation requirements for catastrophe bond offerings. By requesting additional model views, participants can gain a more comprehensive understanding of their financial exposure.
Further reading
For more information on the current landscape, visit the Investing section.
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Do you believe investors should demand more transparent and varied data when evaluating financial risk?
