Monte Carlo (Sept. 14, 2015) – Aon Benfield, the global reinsurance intermediary and capital advisor of Aon plc, has invested in an innovative catastrophe model to help marine and energy insurers more accurately assess their cargo risks.
Catastrophe models are commonplace in the non-marine sector but the marine and energy insurance industry has often found it difficult to accurately manage exposures due to the non-static nature of the risks. To date, existing models have offered no differentiation by commodity type, cargo volume or storage configuration. For example, contrasting cargo types such as rubber tyres and electronics could produce the same level of modelled losses.
Aon Benfield recognised the need for innovation and partnered with catastrophe model vendor RMS to develop a marine and energy catastrophe modelling 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 forthcoming 1 January 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 US hurricane including surge, US earthquake, European windstorm and Asia typhoon.
- Highly detailed industry exposure databases for major global ports, from Shanghai in China to Houston in the US. The databases take into account cargo classification, volume and time in port, based on industry data and research.
This innovative 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;
- Standardisation of marine modelling for the whole industry including a uniform approach to storing marine data.
Paul Miller, international head of Aon Benfield’s catastrophe management team, explained: “This project will drive industry standards for the modelling of marine business and help to revolutionise the way insurers manage their exposures. 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.”
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.
Aon plc (NYSE:AON) is a leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 69,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world’s best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit www.aon.com for more information.