Stochastic event set
A set of tens of thousands of plausible but never observed events, with their frequency, that a catastrophe model derives from history to make up for its brevity.
The stochastic event set is the first building block of a catastrophe model. It contains tens of thousands of fictitious events, hurricane tracks, fault ruptures, windstorm depressions, each described by its physical parameters and an annual rate of occurrence. It exists because history is too short: a few centuries of observations, at best, contain only a handful of extreme events per region, yet an underwriter must price the ones that have not happened yet. The event set is calibrated to reproduce observed frequencies and intensities, then extended by physical and statistical laws toward combinations history does not show. It rests on an assumption of stationarity that climate change weakens, which leads modelers to publish separate long-term and near-term event sets for the same peril.
NOAA's HURDAT2 database records Atlantic hurricanes since 1851, less than two centuries of observations. A US hurricane stochastic event set derives tens of thousands of simulated years from it, which contain scenarios absent from that record, such as a category 5 hurricane making landfall over downtown Miami.
stochastic event set, event set, stochastic catalogue
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