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Catastrophe modeling firm AIR Worldwide (Boston; a Verisk company) has announced that it is collaborating with RenaissanceRe (Hamilton, Bermuda), a global provider of reinsurance and insurance, as part of a joint effort to enhance the industry’s modeling of long-tail casualty risk.
Ian Branagan, SVP, Group Chief Risk Officer, RenaissanceRe.
“Since our inception, RenaissanceRe has been at the forefront of applying science, engineering, and data to inform our independent view of risk,” comments Ian Branagan, SVP and group chief risk officer, RenaissanceRe. “Incorporating third-party expertise from proven leaders such as AIR wherever appropriate is a key part of this process. We’re pleased to work with AIR to advance our industry’s ability to better understand how to model and manage casualty and specialty risk.”
As part of the collaboration, AIR reports that it is producing portfolio-specific casualty losses based on its exposure management application, Arium. Arium’s scenario-based loss-assessment framework enables companies to systematically measure portfolio loss potential and exposures to simulated scenarios representing both emerging risks and forward-projected historical events, according to the vendor. AIR and RenaissanceRe say they will work closely to further refine what they characterize as the industry’s first fully probabilistic model for extreme liability events.
Most Comprehensive Model of Liability Risk
Jay Guin, Chief Research Officer, AIR Worldwide.
“We’re currently developing the industry’s most comprehensive model of liability risk to help companies understand the complex interconnections in their portfolios, resulting in a comprehensive assessment of potential future losses,” comments Jay Guin, Ph.D., chief research officer, AIR Worldwide. “Collaborating with a global leader in risk management like RenaissanceRe is a great step forward in the development of our stochastic model. This model provides a forward-looking view of risk and will enable insurers and reinsurers to capture the full distribution of the frequency and severity of casualty catastrophes.”
“Arium is a powerful exposure management application designed to help companies evaluate liability accumulations and run casualty risk scenarios,” comments Robin Wilkinson, vice president and managing director of casualty analytics at AIR Worldwide. “With Arium, insurers can analyze and quantify their exposure to simulated liability events and become more informed on what types of future events could cause significant losses to their portfolios. As Arium continues to evolve, the stochastic model will enable companies to understand and manage their casualty risk more thoroughly.”