Property Claim Services (PCS) has designated its first two catastrophe events under its PCS Turkey catastrophe loss aggregation and industry loss estimation service, with both events being terrorism insurance related.
PCS launched its PCS Turkey service in May 2015, since when a number of leading industry loss warranty (ILW) brokers have signed up to have access to the data which would be provided on any qualifying catastrophe loss events in the country.
Now the first two catastrophe events have been designated, meaning that PCS will work with the local insurance industry to aggregate claims data and report on the magnitude of the insurance industry loss, data which is useful to reinsurance and ILS firms.
Both of the events are terrorism insurance related, although are in fact related to government response to terror incidents in Ankara, Turkey. Government response to terror attacks is covered under typical terrorism insurance clauses in property insurance policies.
Tom Johansmeyer, Assistant Vice President, PCS Strategy and Development, explained; “The true test of a catastrophe-focused service is whether you can rely on it when tragedy strikes. Our thoughts are with those effected by the events covered in our first two PCS Turkey event designation bulletins.
“Our joint team with the Istanbul Underwriting Center is focused on the loss aggregation process now, per our defined processes. This is the value we bring during an unfortunate event, and it’s what can help the industry respond appropriately. After all, insurance exists for times like this, and our goal is to support our clients and the industry as a whole in this mission.”
Ted Gregory, Director of Operations, PCS, added; “I’m extremely proud of the work we’ve been able to do with the IUC on our first event designation for PCS Turkey. Menekşe Uçaroğlu and her team have demonstrated the difference that strong collaboration can make in loss aggregation activities. The PCS and IUC joint effort will follow our methodology with discipline in the coming weeks and months in order to deliver the industry loss estimate to our clients in the local market and around the world. While the events are tragic and the loss aggregation effort is complex, ultimately, this is what we’re prepared to do. As with any catastrophe event, this is what we do every day.”
Following explosions in Ankara, Turkey on the 13th March the government declared martial law in Sirnak and Nusaybin, after which skirmishes and fighting occurred between government forces and opposition groups in both of those towns, resulting in casualties and losses to insured property.
As a result the two events, in Sirnak and Nusaybin, have been designated under PCS Turkey methodology and the company will aggregate claims data and report on industry losses.
Johansmeyer said; “These events are unique for property-catastrophe, given the relative infrequency of terror with sufficiently high physical damage and time element insured losses. Most of what we’ve seen over the past few years around the world has consisted of smaller events – particularly active assailant. What the insurance and reinsurance industry can learn is that a broad spectrum of cover is necessary in a dynamic environment. The prevailing trend doesn’t always mean the outliers won’t happen.”
Johansmeyer went on to tell Artemis that terrorism is set to become an increasing area of focus for the reinsurance and ILS markets.
“Terror was one of the top topics of conversation in Monte Carlo this year. It came up at the café tables, on the Artemis round table, in the dailies. Everywhere. Global terror is a serious issue for the global insurance and reinsurance community, and given soft market trends, a lot of people seem to think it’ll become even more significant after the next renewal,” he explained”
“What’s interesting, though, is that those conversations were more about the hedge, and the discussion about terror trends tended toward the prevalence of active assailant and other smaller attacks focused more on loss of life than physical damage. And now we’ve seen the unexpected in Mardin and Şırnak. And that’s following unexpectedly high hail losses in the United States this year and the unexpectedly high losses from the Fort McMurray wildfire in Canada. The industry works on expecting the unexpected every day. And what we’ve seen in 2016 shows that it’s a non-stop process.”