The Hurricane Season Begins?

As Insurance Day remarked this morning, “now it gets interesting”….  And so it might, but lets hope if not too interesting as insurers/reinsurers brace themselves for the next 5 months.  The last 2 years have been relatively quiet for US windstorms, however many carriers are still dealing with Katrina, Wilma, Rita and those before aside from other catastrophes in other parts of the world. 

 

Each carrier will have used models to assess exposure and capital adequacy and continue to develop these tools in anticipation of the annual US hurricane season etc.  Many aspects of this work will be discussed at the 2^nd IUA/RAA Catastrophe Modelling seminar in London on 17/18 June (see www.iua.co.uk for details).  One session this year will be to look at the need for a data standard to assist underwriter’s evaluation of property risk information and subsequent modelling.  If one is to be prepared for a hurricane season let’s at least receive material information in a standard form which can easily be transported throughout underwriters’ systems.

 

Much is spoken of ACORD standards for market reform initiatives.  Little is known about an ACORD/industry initiative to design a standard for property risks data.  This work was presented at the recent ACORD/LOMA Annual Conference and received much interest.  Once designed and agreed, the standard will be available for use and will hopefully assist Catastrophe writers to manage exposure during future hurricane seasons.  Those involved in market reform will know of the numerous benefits in using ACORD standards, not least savings in time and money.  Given the increased frequency and severity which previous hurricane seasons have produced, any operational benefit and savings for catastrophe writers must also surely help.