Data aggregators for catastrophe insurance

Data is vital for catastrophe modeling, as well as for determining industry exposure and industry loss estimates. The catastrophe insurance market relies on data collected for vital decision-making.

One of the leading data aggregators is the Pan-European Risk Insurance Linked Services or Perils AG (Perils). Perils was founded in January 2009, but started its operations only in 2010. It is based in Zurich, Switzerland. Perils shareholders include Allianz SE, AXA, Assicurazioni Generali, Groupama, Guy Carpenter, Insurance Australia Group, Munich Re, Partner Re, Swiss Re and Zurich Insurance Group. It operates as a subsidiary of Marsh & McLennan Cos. Inc. Each shareholder holds an equal share. The purpose of Perils is to enhance transparency to the natural catastrophe risk landscape, thereby ensuring its stability in the market, by providing high-quality data relevant to the insurance industry. Perils was incorporated as a joint stock company in Zurich.

Perils AG basically provides catastrophe insurance market data directly collected from insurance companies that write property businesses in Belgium, Denmark, France, Germany, Ireland, Luxembourg, the Netherlands, Switzerland and the United Kingdom. The data collected are compiled on a Cresta level (zones). Cresta refers to the Catastrophe Risk Evaluating and Standardizing Target Accumulations organization. Cresta was established by the insurance and reinsurance industry in 1977 as an independent body for the technical management of natural hazard coverage. Cresta globally determines country-specific zones for the uniform aggregation of insurance data, mainly for property business. Cresta’s main goal is to establish a uniform and global system to transfer, electronically, aggregated exposure data for accumulation risk control and modelling among insurers and reinsurers.

Perils’s operations and services are generally limited to Europe. Its services, however, have been made available in Australia and Turkey. When it started operations in 2010, it focused on European wind events for which total insured losses exceeded €200 million. Today, it provides two main products available on a subscription basis. One, exposure data, provided on an annual basis. Two, loss estimates following a covered natural catastrophe event.

Perils collects data and are subjected to quality control. It is anonymized, aggregated and subsequently extrapolated to industry or market level. The resulting data are made available to its subscribers.

The operation of Perils was patterned after another data aggregator in the United States, the Property and Claims Services which operates for US catastrophes. The Property and Claims Services (PCS) is a subsidiary of Insurance Services Office Inc., a for-profit Delaware stock corporation that is the leading provider of information on property/casualty insurance, including statistical information, actuarial analyses and underwriting services in the United States. PCS is the internationally recognized authority on insured property losses from catastrophes in the United States.  It prepares estimates of total insured property damage for every catastrophe that occurs. It was established in 1984.

Of course, there are other data aggregators. Among them is the Swiss Re Sigma. Since 1970 Swiss Re’s Economic Research & Consulting team collects data from various sources about natural catastrophes and man-made disasters. Each year an issue of the Sigma publication series presents data related to catastrophic risks. Another is the Munich Re Geo Risks Research. Munich Re has been researching geoscientific phenomena, their risks and their loss potentials, since 1974.

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Dennis B. Funa is the current insurance commissioner. Funa was appointed by President Duterte as the new insurance commissioner in December 2016. E-mail: dennisfuna@yahoo.com.