Aon Benfield announced it has invested in an innovative catastrophe model to help marine and energy insurers more accurately assess their cargo risks.
While there are plenty of catastrophe models in the non-marine sector, the marine and energy insurance industry has often found it difficult to accurately manage exposures due to the non-static nature of the risks, according to Aon Benfield, the reinsurance intermediary and capital adviser of Aon plc.
Existing models offer no differentiation by commodity type, cargo volume or storage configuration, which is why Aon Benfield partnered with catastrophe model vendor RMS to develop a marine and energy catastrophe modeling solution.
This new product is available from Aon Benfield, which has broker exclusivity, to offer insurers the ability to refine coverage and purchase more efficient reinsurance at the forthcoming January 1, 2016 renewal.
The model comprises:
- Some 85 cargo and specie vulnerability curves based on 18 commodity types – from pharmaceutical and petroleum to cars and fine art – and 12 storage options. The curves will refine damage estimations for cargo from the perils of U.S. hurricane including surge, U.S. earthquake, European windstorm and Asia typhoon.
- Highly detailed industry exposure databases for major global ports, from Shanghai in China to Houston in the U.S. The databases take into account cargo classification, volume and time in port, based on industry data and research.
Aon Benfield said the model enables marine and energy insurers and reinsurers to:
- More accurately assess cargo accumulations and loss potential from natural catastrophe events
- Improved pricing assumptions for marine risks, leading to more competitive product offerings
- Enhanced exposure management, accumulation control and claims reserving
- Increased reinsurance purchasing efficiency
- Standardization of marine modeling for the whole industry including a uniform approach to storing marine data.
“This project will drive industry standards for the modelling of marine business and help to revolutionize the way insurers manage their exposures,” according to Paul Miller, international head of Aon Benfield’s catastrophe management team.
“Aon Benfield has made a financial investment in this innovative new solution because we believe it will genuinely add value to our clients’ business and growth strategies,” he said.
Aon Benfield’s partnership with RMS also involves future development plans including offshore energy updates, a new marine data schema and a port interconnectivity model.
Source: Aon plc
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