Verisk puts all its catastrophe risk models on next-generation framework – Artemis.bm
Global data and analytics firm Verisk has announced a new milestone for its widely used catastrophe risk models, as it claims to have become the first company to put all of its model range onto a next-generation framework.
The company says that its newly updated catastrophe risk modelling platform will “boost the capability to assess and price intricate risk, and to fine-tune reinsurance tactics for risk transfer.”
More than 100 risk models have been updated to sit on the next-generation modelling framework, available through the Touchstone platform, which Verisk says is used by the top ten U.S. P&C insurers and nine of the top ten global P&C insurers.
“The release of NGM is the next step in our ongoing commitment to making societies more resilient and helping the insurance industry provide protection to their clients when they are impacted by the devastating impacts of natural catastrophes,” explained Rob Newbold, president of Extreme Event Solutions at Verisk.
At the heart of the update is a “new financial modeling framework designed to reflect anticipated insured losses from extreme events more accurately than ever before,” Verisk explained.
The company believes it is “redefining the standards for risk assessment” helping insurance and reinsurance market constituents to make better decisions informed by rich modelling information.
Verisk says that the updated financial framework can now better accommodate complex policy terms and model uncertainty, while it has more streamlined exposure coding and more efficient workflows as well.
“The insights derived from these models supports making better-informed decisions and managing the risk inherent in portfolios,” Verisk explained.
The updated model range on the next-gen framework has “a more complete and accurate view of risk,” Verisk believes, providing “enhanced estimates of technical prices, more refined differentiation of risk for sub-perils within models, and better representation of tail risk.”
There is an improved ability to model complex policy structures, as new methodologies employed offer risk model users “a more comprehensive representation of market terms and conditions, and better representation of uncertainty and geospatial dependencies in loss accumulation.”
Understanding uncertainty is key to the insurance and reinsurance industry and here Verisk believes the new models have advanced significantly, allowing insurers and reinsurers to “better analyze, understand, and mitigate the impact of natural disasters on their business operations.”
Overall, users will benefit from an “accurate and reliable global view of risk across the insurance industry” thanks to the updated financial model, while workflows in the loss calculation have been updated to “reflect policy language and the actual flow of losses more correctly into policy structures,” which Verisk believes makes loss results more accurate and more true to reality, while also making the process to derive them easier.
Finally, with the new model suite launch, Verisk also notes that its latest Verisk Hurricane Model for the U.S. has been approved for filing in Florida.
Newbold further explained, “The insurance industry is evolving, creating new and innovative methods for writing policies in a more complex risk environment. By rebuilding the financial modeling framework that sits behind Verisk’s catastrophe models, we are providing the industry with more flexible and robust tools for underwriting, pricing new business, and managing portfolio risk. NGM will also serve as the basis for our cloud native platforms which will bring further improvements in both insurance and reinsurance workflows.”
