WTW launches model to analyse catastrophe & non-cat property losses

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Insurance and reinsurance broker Willis Towers Watson (WTW) has launched what looks like a useful property loss modelling tool that allows analysis to be performed for both catastrophe and non-catastrophe property risks.

The company said that its Property Quantified risk modelling platform is the first that can help organisations analyse potential property losses across a global portfolio, with the aim of this analysis being to provide information to better optimise risk transfer and insurance purchases.

So the risk modelling tool is useful to property-owning organisations and investors which have large and globally diverse portfolios of property assets.

But it strikes us this could also be useful for underwriters backing portfolios of property risk, which given the ILS fund market’s expansion along the value-chain to underwrite through MGA’s suggests a tool like this could have use for providers of reinsurance capital as well.

WTW said that Property Quantified is not like other single-peril property focused risk models. Property Quantified enables users to model multiple perils using a single technology platform, including both catastrophe risks such as earthquake and hurricane, as well as all other loss types such as fire and vandalism, across the entire world.

With alternative capital increasingly backing property insurance portfolios, so taking on elements of what are often deemed more attritional risks (fire, sprinkler leakage, etc), such a tool could be a useful way to validate exposures in portfolios that are being underwritten, as well as across global portfolios of commercial property type risks.

WTW said that the tool uses proprietary algorithms as well as the industry-leading vendor models in order to provide loss projections and assess insurance strategies in financial terms.

It features a web-based, interactive platform enabling location data to be adjusted and immediate feedback showing the impact to loss potential.

“This powerful tool goes far beyond benchmarking data and natural catastrophe modeling, empowering decisions on property insurance with a level of sophistication not yet seen in the industry,” commented Joe Peiser, head of Broking North America, Willis Towers Watson. “We are committed to delivering innovative risk management solutions to our clients, and Property Quantified is the latest demonstration of Willis Towers Watson’s leadership in the market.”

Whether of use to ILS fund managers who seek to access property risks from more primary sources, via MGA’s or through E&S markets, or not, the tool is interesting as it gives a holistic catastrophe and non-catastrophe view of property portfolio loss potential, which can only help protection buyers to make more intelligent decisions.

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