PERILS expands to Australia, covering multiple catastrophe risks

by Artemis on September 12, 2016

Provider of industry-wide catastrophe exposure, industry loss data and indices, PERILS AG, has announced its expansion outside of Europe for the first time, extending its market coverage to include a range of Australian risks.

PERILS collects and distributes data on catastrophe insurance and reinsurance losses, including property insurance exposure data that covers windstorm, earthquake and flood risks in territories across Europe and, has now expanded to cover bushfire, earthquake, flood, hail, tropical and extratropical cyclones in Australia.

The extension to Australia means that PERILS now covers 15 different territories, with Australia being the first one outside of the EU, and its first country within the Asia-Pacific region.

“The inclusion of Australia is a major new development in the evolution of PERILS, because it represents the first addition of a country within the Asia- Pacific region in our market coverage.

“We are particularly grateful for the support we have received from the primary insurance industry in Australia. Without this support, we could not fulfill our mission to increase transparency in the field of natural catastrophe insurance, and as a result facilitate a more liquid and stable Cat market. Going forward, our target is to add more territories in Asia-Pacific,” said Luzi Hitz, Chief Executive Officer (CEO) of PERILS.

In addition to the extension to Australia, PERILS explains that it will also provide event loss data for events that surpass a market loss of AUD500 million (roughly USD385 million), incurred by bushfire, earthquake, flood, hail, tropical and extratropical cyclones in the region.

“We are proud that PERILS can now also provide industry exposure and loss data for Australia. This will have a positive effect on the modelling and management of Australian catastrophe risk by both improving our understanding of it and by further enhancing its tradability,” said Head of Products at PERILS, Eduard Held.

The firm explains that it collects property sums insured and event loss data from a range of primary insurance companies in Australia per postcode, and property line of business. Then, utilizing this data PERILS produces an “independent and objective dataset” for the overall sums insured and market event losses.

A range of applications and risk transfer products can use the data collected and disseminated by PERILS, such as industry loss warranties (ILWs), catastrophe bonds and other insurance or reinsurance linked securities (ILS).

Furthermore, PERILS explains that the information it provides can also be used to validate catastrophe risk models, something of value to insurers and reinsurers that operate in the region.

“Coming from an independent and trusted reporting agency, PERILS data are ideally suited for the risk assessment and as triggers for industry-loss-based risk transfer solutions. As of today, more than USD 12bn of this kind of risk capacity has been facilitated by our data. Judging from the interest we have received prior to the launch of our new service, we are confident that the addition of Australia will stimulate significant new developments within its risk transfer market,” continued Held.

PERILS Market-wide sums insured exposed to earthquake in Australia

Market-wide sums insured exposed to earthquake in Australia: The PERILS Industry Exposure Database for Australia includes market-wide property sums insured exposed to the perils of bushfire, earthquake, flood, hail, and tropical and extratropical cyclones, and event loss data for these perils. The data resolution is on a postcode (= high-resolution CRESTA Zone) and Property Line of Business (residential, commercial lines) level. The map shows the market-wide property sums insured per postcode for the peril of earthquake.

Julie Batch, Chief Customer Officer at Australian primary insurer IAG, said: “The Australian insurance market represents the intersections of strong regulation, high insurance penetration and catastrophe risk. Creating vehicles that help develop alternate capital structures and encourage and support new investors to the region is critical for the health of the industry. PERILS opens up new opportunities for insurers, industry and the government and represents a significant step forward in data-driven capital innovation.”

In November of last year Artemis discussed PERILS’ expansion into Turkey with earthquake and flood loss events, so it’s positive to see the company continuing to expand into new territories, and outside of the EU. Now the company has a presence in the Asia-Pacific region, it will be interesting to see the firm expand further across the region, to cover new territories and perils.

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