Extract from. Études et Dossiers No. 338

Transcription

1 International Association for the Study of Insurance Economics Études et Dossiers Extract from Études et Dossiers No rd Chief Risk Officer Assembly Key drivers of a new risk culture November 2007 Rüschlikon, Switzerland & The 5 th Annual Round Table of Chief Risk Officers, May 2007 Edinburgh January 2008 Working Paper Series of The Geneva Association Association Internationale pour l'etude de l'economie de l'assurance The Geneva Association - General Secretariat - 53, route de Malagnou - CH-1208 Geneva Tel.: Fax: [email protected] -

2 The Geneva Association Working Paper Series Études et Dossiers appear at irregular intervals about times per year. Distribution is limited. The Études et Dossiers are the working paper series of The Geneva Association. These documents present intermediary or final results of conference proceedings, special reports and research done by The Geneva Association. As they contain work in progress or summaries of conference presentations, the material must not be cited without the express consent of the author in question. Layout & Distribution: Valéria Kozakova The Geneva Association - Association Internationale pour l'etude de l'economie de l'assurance

3 From Google Earth to Risk Management. Shedding Light on your Portfolio through Geocoding Joachim Oechslin and Jürgen Schimetschek Risk management More important than ever before Losses reach new dimensions Changing socioeconomic factors Changing environmental conditions New legal requirements Solvency II 4-1

4 Geographical information systems More transparency in risk management Portfolio and/or loss data Geocoding Analyses Computer models Scenarios Risk-adequate action Geographical information systems are a combination of hardware, software, data and applications Insurance market data Portfolio and loss data Hazard information Hazard maps GPS coordinates Aerial photographs and satellite images GIS applications Geocoding means attaching geographical coordinates (longitude and latitude values) to each insured property Portfolio and/or loss data are geocoded in different degrees of spatial detail (e.g. towns, post codes, addresses) Geocoding is crucial for portfolio-specific analyses, models, and scenario calculations Transparent portfolio information is the basis for underwriting decisions and improved risk management Enhancement of risk transparency More transparency in risk management 2-digit Postcode (last century) 5-digit Postcode (yesterday) Address and house number (today) 4-2

5 Visualising data Levels of detail and their suitability for modelling and simulation in underwriting New technologies in risk management The future demands more details! - Solutions for modelling and calculating scenarios - Improved accumulation control - Improved loss management 4-3

6 Tools and services for risk managers and underwriters Services offered by Munich Re Geo Risks Research Department GlobalLocationFinder locates and visualises insured risks around the globe. GAP Service identifies, analyses and maps exposure concentration and vulnerability of portfolios. CatLoss Estimation Service guarantees efficient loss management shortly after a storm or hail event. NATHAN enables cedants to conduct worldwide risk analyses of natural hazards. 4-4

7 GlobalLocationFinder Geocoding of non-life risk locations on a worldwide scale. The workflow of geocoding insurance risks GlobalLocationFinder >>Structured cedant data >> Geocoding >> Mapping G e o c o d e r Addresses in any spreadsheet or database can be geocoded Automatic process to attach coordin-ates to an address Visualisation of risk locations 4-5

8 Geocoding service GlobalLocationFinder Your advantages at a glance Automatic visualisation of geographic coordinates of unlimited risk locations in portfolios Analysis of portfolio quality (identification of incorrect risk addresses and CRESTA validation) Multi-location policy capability (identification of all individual risks) Improved risk transparency and accumulation control Portfolio optimisation through risk diversification GAP Service Nat cat risk assessment and identification of exposure concentrations in portfolios. GAP stands for Geographical Assessment of Portfolios. 4-6

9 Distribution of risk locations worldwide GAP Service Geographical Assessment of Portfolios Combination of risk locations and hazard zones GAP Service Geographical Assessment of Portfolios EQ zone Number Per cent 3,259 risks are located in earthquake zone 2 4-7

10 Multi-peril analysis GAP Service Geographical Assessment of Portfolios 100% Exposed sum insured (Logistics car parcs) 90% 80% 70% 60% Percent 50% 40% 30% 20% high threat, Zone 3 medium threat, Zone 2 low threat, Zone 1 no threat, Zone 0 10% 0% Earthquake Volcano Tsunami Tropical cyclone Winter storm Storm surge Tornado Hail Tempest River Flood Hazard Accumulation analysis of risk locations in Berlin GAP Service Geographical Assessment of Portfolios Where are my most valuable risk locations? 4-8

11 Accumulation analysis of risk locations in Berlin GAP Service Geographical Assessment of Portfolios Where are my new locations? Nat cat risk assessment and portfolio analyses GAP Service Geographical Assessment of Portfolios Your advantages at a glance Quick identification of exposure concentrations Combination of risk locations with hazard information (hazard look-up) Accumulation control (automatic identification of CRESTA zones) Identification of hot spots and clusters Selection of policies driving the PML The tool supports proactive risk management and helps to identify potential business opportunities 4-9

12 CatLoss Estimation Service Calculation of weather-related losses for storm and hail within 48 hours Workflow CatLoss Estimation Service The results (estimated loss, areas mainly affected) are available 48 hours after the event has occurred. 4-10

13 Identification of policies affected CatLoss Estimation Service Policies Policies affected (wind speeds > Bft. 8) Storm LOTHAR (km/h) Loss-survey and loss-estimation CatLoss Estimation Service Customer loss estimation Date of estimation: 9 July 2004 Date of event: 8 July 2004 Type of event: Hailstorm Affected area: Bavaria, Baden-Württemberg, Saxony, Hamburg, Brandenburg Loss estimation for: Total sum insured: Estimated overall loss: Sample company EUR 40bn (96,824 risks) Approx. EUR 3m (6,170 risks affected) 4-11

14 The Geneva Association Etudes et Dossiers no. 338 Modelling losses after major flood events CatLoss Estimation Service Using satellite data August flood in Germany 2002 Risks Claims Rapid claims management CatLoss Estimation Service Your advantages at a glance Quick, unbureaucratic claims handling Proactive claims management and prompt settlement of claims Identification of potential cases of fraud Visualisation helps to enhance the marketing strategy and improve portfolio quality Innovative Combined advantages: Loss estimation and portfolio optimisation 4-12

15 NATHAN Web-based tool for risk analysis on natural perils worldwide plus additional information on major disasters and country profiles NATHAN Web based service product NATHAN stands for NATural Hazards Assessment Network NATHAN is available to our clients via the internet A "light" version of NATHAN without insurance-market statistics or information on insured losses and insurance zones (CRESTA) can also be accessed on our website. Composed of 3 modules Natural Hazard Maps Major Disasters Country Profiles 4-13

16 Workshop and discussion Workshop and discussion data security claims management IT costs return of investment prevention service confidence The most important factor in improving underwriting is better information on risks Executives believe that they need more granular risk assessments than traditional approaches. Economist & Deloitte Insurance Survey 2003 higher amount of work for underwriter 80% geodata in insurance transparency accumulation control Solvency II increasing premiums 4-14

17 Workshop and discussion Group 1: Do you think geo solutions based on geocoding achieve greater risk transparency? Does risk management profit from the additional input in terms of capital and human resources required for data preparation? Group 2: Which lines of business can be supported by the geographical approach? Where do you see new opportunities? What are the consequences of high resolution geocoding based on addresses? Outlook 4-15

18 Next steps Overlaying geodata with city models for a holistic 3D-analysis Next steps Overlaying geodata with city models for terrorism simulation Quelle: RMS

19 Publications on the topics presented