Citigroup Flags 66% Iran War Probability From Verisk’s New Predictive Model
C•Citigroup warns that legacy risk models fall short as Verisk’s Predictive War Index, trained on 1995–2022 political, economic and social data, would have signaled a 66% chance of Iran conflict 1½ months before outbreak. Verisk’s Geopolitical Relations Index now quantifies bilateral tensions using past clashes, government similarity and proximity.
1. Citigroup’s Risk Model Critique
Citigroup Inc. cautions that traditional war risk scenarios based on historical data no longer suffice, warning investors, banks and insurers against relying on “rear-view mirror” methodologies. The bank emphasizes the need for forward-looking analytics to better anticipate shifts in oil prices, mortgage costs and broader market impacts driven by military conflicts.
2. Verisk’s Predictive War Index and Geopolitical Relations Index
Verisk’s new Predictive War Index uses a machine learning algorithm trained on political, economic and social datasets from 1995 to 2022 and would have forecasted a 66% probability of war in Iran 1½ months before the conflict began. Its Geopolitical Relations Index tracks tension levels between pairs of countries by evaluating past military clashes, government similarity and geographic proximity to project future risk dynamics.
