The use of interactive mapping software, which helps carriers pinpoint the precise location of individual risks, is the best way for companies to minimize their exposures and optimise capacity in today's volatile climate, say specialists.
John DeMartini, senior v.p. at reinsurance broker Towers Perrin Re, says mapping tools are a simple way to make up for some of the shortcomings of catastrophe models. He says they complement the loss analyses generated by the models, helping clients to better understand the positioning of each risk relative to the coastline or other nearby dangers.
"Mapping has now evolved from something fairly clumsy into a very sophisticated set of tools," says DeMartini. "It is user-friendly and fast, and it meets all the criteria for a tool that can be employed real-time in an underwriting environment. We can show clients how to continue growing their portfolios, while not growing their exposures to catastrophe losses."
Companies like Intermap Technologies and Harvard Design & Mapping create accurate digital models of the earth's surface at given locations. A client can then gain further insight into the risks they write using satellite imagery, aerial photography and radar.
Such enhancements are especially valuable now as companies prepare for the release of software updates from the three main risk modelling firms in May, says David Delaney, v.p. of reinsurance broker Gallagher Re. Many insurers fear there will not be enough time to get to grips with the model changes before the July 1 renewals.
"More of our U.S. clients have asked for high-resolution detail on their exposures," says Delaney. "They want to understand where their biggest exposure concentrations are, right down to street level. Mapping has always been something we have tried to incorporate into our analysis."
But Steve Smith, an atmospheric physicist and v.p. with ReAdvisory, the catastrophe modelling arm of reinsurance broker Carvill, says it will take time for the industry to adopt mapping tools. He says the computing power required to run catastrophe models is already a big burden on insurers' resources.
"Using these tools is easy in theory," says Smith. "But people don't do it because mapping is an extra step. It's also about learning how to use the mapping software in addition to the catastrophe modelling software."
It can take weeks to gather sufficient data to generate a sample probable maximum loss for the average portfolio, says Smith, leaving insurers little time to research new products and capabilities.
John DeMartini, senior v.p. at reinsurance broker Towers Perrin Re, says mapping tools are a simple way to make up for some of the shortcomings of catastrophe models. He says they complement the loss analyses generated by the models, helping clients to better understand the positioning of each risk relative to the coastline or other nearby dangers.
"Mapping has now evolved from something fairly clumsy into a very sophisticated set of tools," says DeMartini. "It is user-friendly and fast, and it meets all the criteria for a tool that can be employed real-time in an underwriting environment. We can show clients how to continue growing their portfolios, while not growing their exposures to catastrophe losses."
Companies like Intermap Technologies and Harvard Design & Mapping create accurate digital models of the earth's surface at given locations. A client can then gain further insight into the risks they write using satellite imagery, aerial photography and radar.
Such enhancements are especially valuable now as companies prepare for the release of software updates from the three main risk modelling firms in May, says David Delaney, v.p. of reinsurance broker Gallagher Re. Many insurers fear there will not be enough time to get to grips with the model changes before the July 1 renewals.
"More of our U.S. clients have asked for high-resolution detail on their exposures," says Delaney. "They want to understand where their biggest exposure concentrations are, right down to street level. Mapping has always been something we have tried to incorporate into our analysis."
But Steve Smith, an atmospheric physicist and v.p. with ReAdvisory, the catastrophe modelling arm of reinsurance broker Carvill, says it will take time for the industry to adopt mapping tools. He says the computing power required to run catastrophe models is already a big burden on insurers' resources.
"Using these tools is easy in theory," says Smith. "But people don't do it because mapping is an extra step. It's also about learning how to use the mapping software in addition to the catastrophe modelling software."
It can take weeks to gather sufficient data to generate a sample probable maximum loss for the average portfolio, says Smith, leaving insurers little time to research new products and capabilities.
