Catastrophe Loss Index - CLI

Insurance companies are always protecting their bottom line. The goal is to make money, not constantly lose it to claimants. That’s why insurance firms use something called the Catastrophe Loss Index to project the number of insurance claims pending from a natural disaster or other significant event that is pending. The index assigns a number that covers expected losses on housing, automobile, and commercial property policies.

The primary purpose of the CLI is to help firms set capital aside in case of a wave of claims. They also use the CLI to decide the right time and locations to send out their adjusters to verify the submitted claims.

The loss index covers a wide number of natural and manmade disasters, including hurricanes, tropical storms, ice, fire, volcanic eruptions, civil riots, snow, and even explosions.