Plugging the information gaps that expose insurers to unexpected catastrophe losses

02 May 2014

Insurers still face unplanned and unacceptable levels of risk from natural catastrophes as a result of critical errors and omissions in their property exposure data, according to Gavin Lewis, commercial director for inhance.

“Very significant risk factors, including the precise building location, its use and construction type, and rebuilding value, can be missing or inaccurate in the information an insurer holds. This can lead to unexpected losses and large uncertainties in catastrophe model output which the insurers use for capital allocation,” he explained ahead of the London market launch of inhance on Tuesday 6th May.

US and London based risk management innovation company, ImageCat, has spent the last three years working directly with more than 20 London market insurers to develop inhance, a powerful analytics and data platform that allows users to quickly identify incomplete or poor quality data and isolate high risk properties for further improvement and analysis.

Matt Foote, head of exposure and catastrophe management for Mitsui Sumitomo Insurance Ltd., London, comments, “Data quality is one of the industry’s most intractable problems, and we welcome initiatives like inhance which help us to isolate unidentified high risk properties and manage our exposures.”

Risk management chain

Lewis adds, “Inhance can be used throughout the whole chain of risk management from property owner to securitised risk transfer. “Like insurers, business with large, international property portfolios need tools to identify where the gaps and errors in the data they hold expose them to unacceptable risks from natural catastrophes.

“These businesses may have incomplete or inaccurate data, particularly for property risks which have come through acquisitions of other companies. This means they will not have a complete picture of how they, their suppliers and their transport networks could be affected by a major catastrophic event.”

With over 500 global hazard layers, inhance allows global property owners and insurers to view their sites and properties easily against a range of perils, including earthquake, wind, flood and sea level rise, to gain more precise insight into the levels of exposure across their multinational portfolios.

For insurers, especially, inhance offers multiple benefits:

  • Greater confidence in catastrophe model output
  • Competitive advantage from improved risk selection and pricing
  • Solvency II compliance for exposure data
  • Enhanced capital allocation process
  • Strengthened reinsurance programme planning
  • Improved risk management for other location-specific classes of business, such as fine art, specie, construction energy and cargo
  • Rapid assessment of post catastrophe impacts.

Inhance has a unique pricing model in the world of catastrophe risk management. It offers three levels of subscription, including a simple, pay-per-use for corporates and small companies that offers access to global flood, earthquake, windstorm and many other perils, and non-catastrophe datasets. inhance will also be compatible with the new non-profit loss modelling framework, Oasis, launched in January this year.

Further information available at