The block maxima approach can avoid the data loss issues that sometimes arise under the POT approach, which constitutes an advantage of GEV compared to POT.

The additional parameter that is included in the POT approach, but not the GEV approach, is a location parameter that measures the central tendency of the extreme loss distribution.

A drawback of the GEV approach is that the parameter estimates describing the extreme loss distribution suffer from the fact that the choice of the threshold over which losses are considered extreme is subjective.