Provides Property Insurers with New Tool for Assessing Portfolio Risks
New York, March 13, 2006 – Guy Carpenter & Company, Inc., the leading global risk and reinsurance specialist and a part of the Marsh & McLennan Companies (NYSE: MMC), today unveiled its new Agricultural Risks Exposures (ERA) model for Italy�s hail insurance market. The ERA model was designed to improve risk evaluation for reinsurance treaties in the increasingly risk-diversified Italian crop hail market for property insurers. ERA aggregates and analyzes information on crop hailstorm results and exposures by comparing the principal characteristics of an insurer�s crop hail portfolio to the broader market in order to more accurately assess exposures.
The ERA model is based on a broad database of information on total sums insured, premiums, losses and quantities insured and bought from the Italian assisted hail insurance market since 1998. ERA divides this information into seven causes of risks, or insurance coverage, grouped by single risk (hail), multi-risk (hail, frost and hoar frost) and product yield-based (MPCI) policies.
�Historically, there has been a wealth of information available on crop hail results in Italy, but what has been missing is a program that can analyze all of the available data and more effectively evaluate risk, on both a national and regional level,� said Andrea Manzitti, Managing Director and head of Guy Carpenter�s Italy office. �With ERA, it is now possible to create detailed, customized crop hail analyses, both by aggregating data across various provinces and by looking at different product mixes within a single geographic area. ERA can also provide thematic maps that graphically show portfolio exposures in a given risk zone.�
In addition, ERA can be used to:
Compare the exposures and results of hail portfolios with broader market data from a given year or period of several years
Facilitate the creation of a new hail portfolio for companies interested in expanding their crop hail business by simulating, on the basis of historical data, loss ratio development
Evaluate underwriting risk levels in different geographic zones and by product for existing portfolios, by using thematic maps
Estimate exposure limits based on the volatility of historical results per province and/or per product
About Guy Carpenter & Company, Inc
. is the world’s leading risk and reinsurance specialist and a part of the Marsh & McLennan Companies, Inc. Guy Carpenter creates and executes reinsurance and risk management solutions for clients worldwide through more than 2,400 professionals across the globe. The firm’s full breadth of services includes 16 centers of excellence in Accident & Health, Agriculture, Alternative Risk Transfer, Environmental, General Casualty, Investment Banking*, Life & Annuity, Marine & Energy, Professional Liability, Program Manager Solutions, Property, Retrocessional, Structured Risk, Surety, Terror Risk, and Workers Compensation. In addition, Guy Carpenter’s Instrat® unit utilizes industry-leading quantitative skills and modeling tools that optimize the reinsurance decision-making process and help make the firm’s clients more successful. Guy Carpenter’s website address is www.guycarp.com.