12 September 2016 Insurance

PERILS expansion strategy reaches Australia

PERILS, a provider of catastrophe insurance data, has taken its first step towards the Asia-Pacific region by extending market coverage to Australia.

“The inclusion of Australia is a big story for us. It’s our first market in the Asia-Pacific area,” Luzi Hitz, chief executive officer of the Zurich-based company, told Monte Carlo Today.

The addition of Australia brings the number of territories currently covered by PERILS to 15—and it’s set to increase.

“Turkey was added to our market coverage last year and that’s already an important step towards the East,” Hitz said.

“We are convinced the kind of work we do, and the data we provide, mean that any market exposed to natural catastrophes can profit from it,” he added. “A number of countries in the Asia-Pacific have heavy cat exposures so we will not stop with Australia and will try to extend our work in the region.”

The decision to cover Australia was simple: market participants asked the company to do so.

“Australia is a very strong cat capacity buyer in the world, and is exposed to several natural perils,” explained Hitz.

“An independent reporting facility for big cat events, could facilitate an industry loss market and potentially facilitate new risk transfer solutions for the Australian market.”

The PERILS database will provide market-wide property sums insured exposed to the perils of bushfire, earthquake, flood, hail, and tropical and extratropical cyclones in Australia.

The company will also provide event loss data for any events above a market loss of A$500 million ($377 million) caused by the perils.

Eduard Held, head of products at PERILS, added: “We are proud that PERILS can now provide industry exposure and loss data for Australia. This will have a positive effect on the modelling and management of Australian catastrophe risk by improving our understanding of it and by further enhancing its tradability.”

The move seems to have been welcomed by the market in Australia.

“Creating vehicles that help develop alternative capital structures and encourage and support new investors to the region is essential for the health of the industry. PERILS opens up new opportunities for insurers, industry and the government and represents a significant step forward in data-driven capital innovation,” said Julie Batch, chief customer officer at Australian insurance group IAG

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