Already, modeling and predicting catastrophes is the most difficult yet vital aspect of Travelers' business. Travelers, as do all insurers, use models to price their premiums accordingly so that they will have adequate funds to pay necessary claims while making a profit at the same time. However, these models are highly dependent on rather ambiguous assumptions and as a result may end poorly for TRV if the company fails to accurately predict catastrophes. Furthermore, many climatologists believe that emerging climate and geological trends are causing the incidence of catastrophes to increase, thus possibly increasing the amount of TRV's claims expenses.
