International Istanbul Insurance Conference 25 September, 2014 Joe Louwagie Assistant Vice President...
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Transcript of International Istanbul Insurance Conference 25 September, 2014 Joe Louwagie Assistant Vice President...
International IstanbulInsurance Conference
25 September, 2014
Joe LouwagieAssistant Vice PresidentProperty Claim Services
© Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Mission StatementPCS is committed to serving our customers and supporting the global insurance industry through the identification and provision of reliable, accurate, objective, and timely catastrophe loss estimates.
Core ValuesService
Integrity
Objectivity
Confidentiality
Transparency
Reliability
Consistency
Operating Principles We will achieve our mission by:
Exceeding service and quality expectations
Facilitating an ease of doing business
Consistently producing a high quality product
Innovating within a culture of continuous improvement
Providing value in corporate citizenship
Who We Are
© Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
U.S. catastrophe claim information since 1950
PCS formed at request of insurance industry
Loss development surveys started in 1998
Estimates based on retrospective claims review
Continual improvement amid consistency w/past
Aggregating Actual Claims Data for 63 Years
PCS HistoryServing the insurance industry
© Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Primary insurance carriers
Marketing and Sales for agency bonuses
NOAA and governmental economists
Industry quarterly and annual reports
Catastrophe modelers
Reinsurers and reinsurance brokers
Capital markets
Providing a Service to Support the Insurance Mechanism
PCS Data UsersBroad benefit across industry and in various sectors
© Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
PCS Estimate Benefits to Insurance Carriers
CAT claim frequency
Concentration of risk assessment
Loss ratio analysis
Underwriting
Actuary
Probable Maximum Loss analysis
Risk transfer ability
Internal quality controls
Risk Mgmt.
Reserve and pricing calibration
In-house model baselining
Strengthens regulatory approval
Claims
Cat code for reinsurance
Claims quality calibration
Adjuster resource allocation
© Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
3.06
6.52
3.55
10.65
7.758.95
24.4
14.39
9.95
11.812
20
13
25
18
22
19 1918
23
PCS Cat Activity 2014 Winter storms and thunderstorms
2014
Average
Thunderstorms Drive 2014 Activity
``
24 designated cats $11.8B in insured loss 5 winter storms, 1 EQ 18 Thunderstorms
24 designated cats
$16.6B in insured loss
More peril diversity
# of
Cats
(In $B)
© Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Cat Bond Market Overview1st half 2014
$5.6 billion, 18 transactions $4.7 billion, 14 transactions
PCS data used in 36% of worldwide transactions
North American Issuance
TotalIssuance
Rest of WorldNorth America
PCSAll other
$4.7B
$0.9B
$2.0B
$2.7B
© Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
First Half 2014 IssuanceBusiest in Market History
87%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
$662M$471M
$906M
$1.7B
$3.5B
$1.8B
$808M
$2.1B
$592M
$2.1B
$3.0B
$5.6B Historical First Half Issuance Activity
© Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Cat Bond 2014 Trends Market diversity in geography and size
Five first time sponsors
$1.3B in fresh capital
Cat bond heavy with cat bond lite
Activity at the extremes
Continued Florida focus
Both small and large
Armor ReCitrus ReGator Re
Sanders Re
Indemnity trigger use of PCS
PCS on about 1/3 of cat bonds
© Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Cat Planning and New TechnologyVerisk Climate Respond and XACTWARE Property Insight
Benefits Benefits
Enables pro-active outreach
Helps refine reserve cone
Differentiates service
Allows thousands of granular views
Supports PCS Estimates
Improves Adjuster positioning
Facilitates improved planning
Decreases response time
Enables pro-active outreach
Continuing to add perils
Peril map visuals
Aerial technology
© Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Cat Planning and New TechnologyLeveraging mapping technology from an IA perspective
Quickly Identify extent of probable damage
Matching claim size to skill level
Improves accuracy, customer service
Reduces cycle time
Overlays claims to damage
Matches before/after visuals
Improves ability to quickly assess
© Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Dimension rooms Diagram structures Drone diagramming
How Long Before Drones Diagram Houses?
Cat Planning and New TechnologyProperty claim technology awareness
Mobile Device
Thermal Imaging
© Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
PCS InnovationApp roll-out in September 2014
PCS Innovation Driven by Customer Feedback
PCS APP
Serves a need for field access
Ready for September release
Ready for US and PCS-Canada
Facilitates future innovation
Photo upload capability in 2015
© Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Market demand for energy and marine index
Current inability to transfer risk effectively
Responding to customer requests for PCS to review
PCS Global Energy and Marine Decision in 1st Quarter 2015
PCS Global Energy and MarinePursuit of a new PCS index (fully separate from core PCS)
Market need
Hired in April consultant to develop methodology
Commenced two working groups in July
Broad industry representation on both work groups
Will share with market prior to commencing
Project status
© Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Daily weather monitoring
Storm and event tracking reports
Tracking of claims and insured loss
Sharing of global cat planning and response best practices
Use for reinsurance and capital markets transactions
PCS in a local marketUsing PCS to help with catastrophes
PCS Exists to Support the Global Insurance Industry
© Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Questions&
AnswersQuestions at any time: [email protected]
© Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Objectivity Integrity Service Transparency Reliability Consistency
© Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Auto Cat planningProtecting your value and service
250K Flooded vehicles from Sandy
One vs. multiple tows
Salvage yard with $0 storage
Agreed re-sale fees & proper titling
Maximizing re-sale value
Storage yard volume reduces cost
Agreements with car rental agencies
© Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
PCS Cat Activity 2014Distinguishing between one and two cats in early January
January 3-5
Heavy Snow
Over by January 5th
Cat
#31
Cat
#32
January 5-8
Continual freeze in MW
Temperature rise in East
Winter Storm drives 2014 First Quarter Activity