Demand for PERILS data grows steadily
PERILS AG, the independent Zurich- based company providing industry-wide catastrophe insurance data, has seen a huge growth in use of its data over the past five years. This demonstrates the value of PERILS’ work and paves the way for further expansion, according to PERILS CEO Luzi Hitz.
“Five years ago, the CRO forum launched the PERILS industry initiative with the aim of making objective and independent Cat data more readily available,” he said. “Since then we have made great progress. Our data are widely used in risk assessment, Cat model validation and portfo- lio benchmarking, and we have de facto become the standard for industry-loss based risk transfer for European windstorm. We are very grateful to see such a broad use of our data.”
Since its inception, PERILS has broadened its scope, including Norway and Sweden in its data in 2010 and also adding UK flood and the twin perils of earthquake and flood in Italy. At present, it is working also on the expansion of its coverage into central and eastern Europe for the peril of flood.
Hitz believes that PERILS’s approach to data helps create the level of transparency re- quired for a better understanding of risk.
“If you look at our data base it’s extremelytransparent – it’s highly standardised, people recognise the format immediately and that’s why I feel this kind of standardisation and transparency helps a lot to win trust,” he said. However, he warned that the trend for greater granularity can threaten transparency. “If you have too much granularity and gigabytes of data, it can be hard to see the wood for the trees,” he said. “The industry should not forget that an aggregated view is a start- ing point and then you can drill deeper. We should not jump directly to super high granular stage.”
He added that transparency is particularly important to the capital markets.
“If you are new to a market you want to understand the risk,” he said. “But if you look at differences between this alternative market and capital markets and traditional reinsurance in terms of underwriting and how they look at risk, there are less and less differences in how they assess the risk.
