AIR releases Touchstone 2.0, adds non-catastrophe risk analysis

Risk modelling firm AIR Worldwide has released version 2.0 of its Touchstone catastrophe modelling platform. The new version includes the ability to account for both catastrophe and non-catastrophe risks in a single platform, providing a single view of exposures.

Including non-catastrophe risks (for example, fire, lightning, explosion, vandalism) enables insurers, reinsurers and of course also the insurance-linked securities (ILS) players including providers of fully-collateralized reinsurance with the ability to better understand the risks they face, from both the recognised peak catastrophe perils and also these lesser non-catastrophic risks.

Touchstone 2.0 also features a new “underwriting mode”, which streamlines the account underwriting process as well as additional new functionality enabling re/insurers to adjust model output to reflect their own view of risk.

“We’re happy to see that AIR is successfully executing on its vision for Touchstone,” commented Robert Baldrey, chief catastrophe officer at TransRe. “Touchstone was available when we needed it, and the migration was very smooth thanks to AIR’s excellent support team. Accelerated run times and the new geospatial module let us visualize exposures and create custom reports more efficiently. Overall, Touchstone’s flexibility and speed are already helping us refine our exposure analysis on behalf of our global customers.”

AIR is also making use of data from across its parent company Verisk’s family of firms. These include ISO advisory prospective loss costs and ISO’s Property Size-of-Loss Database (PSOLDTM), with more than one million severity curves showing expected loss for various policy limits.

ISO non-catastrophe information for both insurance and reinsurance pricing analysis is also available in the Touchstone platform and can be combined with modelled catastrophe losses to offer a more comprehensive risk management solution.

“Adding noncatastrophe analytics to Touchstone enables companies to analyze the noncatastrophe risk to property exposures using the same exposure data they use in their catastrophe modeling,” commented George Davis, FCAS, MAAA, senior vice president at AIR Worldwide. “With Touchstone, users get a more complete view of risk in one streamlined workflow, making analysis of individual direct and facultative accounts and treaty reinsurance portfolios much easier and more efficient.”

The underwriting mode could be very useful for ILS players offering collateralized reinsurance and private ILS deals. It allows for the evaluation of the quality of an account’s exposure data and whether or not the locations violate a company’s underwriting guidelines as well as the catastrophe risk profile of a policy. A new clash analysis feature also shows whether a location within the policy being considered is collocated with other risks already assumed, a particularly useful tool for ILS capital providers we would imagine.

Touchstone 2.0 also offers the functionality to adjust ground-up losses by event, region, line of business, or coverage to better reflect a company’s loss experience, underwriting guidelines, and its own internal research or for use in sensitivity tests. The AIR view of risk is always available alongside the modified view.

“With the release of Touchstone 2.0, AIR continues to demonstrate our ability to deliver and expand on our promise to provide the market the next-generation catastrophe modeling platform,” added Bill Churney, COO at AIR Worldwide. “Companies are already experiencing the many benefits of Touchstone. The feedback we’ve received – not just on existing functionality but on our long-term strategy for Touchstone – has been tremendous.”