An innovative new risk modelling tool has launched this morning which could help to increase transparency and understanding when modelling casualty risks for insurers, reinsurers and insurance-linked securities (ILS).
Praedicat, a firm created by RAND Corporation and risk modelling firm Risk Management Solutions, Inc. (RMS) and backed by other investors, is the world’s first liability catastrophe risk modelling company.
Today Praedicat has launched CoMeta™, an analytics tool for use in modelling of casualty risks. CoMeta is a cloud-based software tool which mines data in published science to identify and model casualty risks, providing liability catastrophe analytics. Praedicat said that CoMeta delivers innovative, science-based and forward-looking analytics for casualty risks to the global financial services industry.
CoMeta will deliver commercially relevant analytics, which can be used to inform underwriting and capital management of casualty risks at property and casualty insurers, via its cloud based software platform. The risk analytics are built on metadata created through the text-based data mining of peer-reviewed science.
“Traditionally, insurers rely on claims data, which is looking backward,” said Robert Reville, Chief Executive Officer of Praedicat. “CoMeta uses big data technology to help our clients look forward, scalably translating the text of millions of peer-reviewed articles into data our clients can use to write casualty insurance and reinsurance sustainably and profitably.”
“CoMeta represents a new and innovative approach to risk modeling, a field that has been criticized for being a black box,” commented James A. Thomson, Praedicat’s chairman. “Praedicat’s big data technology generates enormous amounts of risk information. CoMeta provides direct access to the data and transparency into the modeling parameters. Our motto is ‘No black box.’ ”
“Property insurance has been transformed by catastrophe risk modeling,” added Hemant Shah, co-founder and CEO of RMS and a director of Praedicat. “CoMeta represents a real breakthrough for the industry and the beginning of an exciting time for commercial casualty insurance and related capital markets.”
Praedicat has also announced a new funding round today, having raised an additional $4m from backers including RAND Corporation, RMS and angel investors, to support its continued growth and development.
Robert Reville said; “We have ambitious plans for building out our technologies and increasing the scope of risks covered.”
This is a very interesting development for insurers, reinsurers and the capital markets ILS space as Praedicat promises to make casualty risks more understandable and to uncover data which has in the past been hidden from models and in the realm of expert knowledge.
Advancements in casualty risk modelling will help to make casualty rick pricing more accurate and help insurers, reinsurers and ILS managers to better understand the tail-risks inherent in casualty business. The launch of technologies like CoMeta will no doubt help to make casualty risk a more easily modelled and better understood class of business, which should in turn lead to more involvement from the capital markets in reinsuring casualty risk.