PERILS updates European windstorm industry loss forecasting tool

PERILS AG, the provider of industry-wide European catastrophe exposure, industry loss data and indices, has updated the underlying loss model of its Wind-Jeannie tool in advance of the coming 2016/17 European windstorm season.

PERILS launched Wind-Jeannie in time for last years European windstorm season. The online tool provides forecasts of potential insurance or reinsurance industry losses from European windstorms as they actually approach the continent.

This type of early warning system, for the potential magnitude of a windstorm loss, is a vital input to help insurance and reinsurance companies to prepare for any impact, as well as for re/insurance and insurance-linked securities (ILS) players to base their hedging decisions on.

Now the website and its underlying loss model have been updated by PERILS, to incorporate insights and data from recent European windstorms such as such as Elon-Felix (Jan 2015), Mike-Niklas (Mar 2015), and Nils (Nov 2015). In addition, PERILS has updated the modelled sums insured data using the latest version of its Industry Exposure Database 2016.

Commenting on the update, Luzi Hitz, CEO of PERILS, stated; “After the launch of Wind-Jeannie last year, we were pleased with its performance during the windstorm season 2015/2016. It takes less than 15 seconds to check a forecast and if conducted regularly this can help to establish a clearer picture of the potential impact of an approaching windstorm event and where the most significant insured losses might occur.”

Eduard Held, Head of Products at PERILS, added; “Wind-Jeannie is designed in the same way as a standard weather forecast website. It is fast and user-friendly, and can be accessed via desktop computers, tablets and smartphones. Users can also set up email alerts for windstorm events that are forecasted to generate industry losses in excess of EUR 100m. In our view, Wind-Jeannie is unique in the current market place. Its effectiveness to date is testimony to the usefulness of PERILS market data and the innovation it can trigger.”

Wind-Jeannie (www.wind-jeannie.org) provides forecasts of the potential insured property market loss from windstorm events for a forthcoming 72-hour period. Industry loss forecasts are updated in real-time twice a day at 6am and 6pm CET and are broken down by country and CRESTA zone.

The provision of estimates of the potential insurance and reinsurance industry impacts from an approaching storm is a vital input for hedging decisions. With the live-cat market active in recent hurricanes, such as Matthew, it is to be expected that should a major European windstorm threaten this season there would be live-cat trading of reinsurance and retrocession instruments.

In such a scenario, the availability of modelled forecasts of the loss can help insurance, reinsurance and ILS markets to prepare for any loss and acquire hedging capacity more intelligently to better protect themselves.