Verisk pioneers next-gen models transforming catastrophe risk assessment
Verisk has achieved a significant milestone by transitioning its entire range of models to a next-generation framework, marking “a monumental leap forward” in global catastrophe modelling and risk analysis.
Verisk has launched its Next Generation Models (NGM), a suite of more than 100 risk models that will be implemented by insurers and reinsurers to evaluate risk across the globe with a new financial modelling framework designed to reflect anticipated insured losses from extreme events “more accurately than ever before”.
With NGM, the aim is to redefine the standards for risk assessment, providing insurers and reinsurers with the tools they need to make informed decisions and mitigate the complexity of modelling potential losses effectively, and ultimately driving innovation and resilience within the insurance sector, the company said.
The framework is accessible through Verisk’s catastrophe risk management software platform, Touchstone, which Verisk says, is used by the top ten US P&C insurers and nine of the top ten global P&C insurers.
The company also announced that its hurricane model for the US, available as part of NGM, has been approved for filing in Florida.
“The release of NGM is the next step in our ongoing commitment to making societies more resilient and helping the insurance industry provide protection to their clients when they are impacted by the devastating impacts of natural catastrophes,” said Rob Newbold (pictured), president of Extreme Event Solutions at Verisk.
“The insurance industry is evolving, creating new and innovative methods for writing policies in a more complex risk environment. By rebuilding the financial modelling framework that sits behind Verisk’s catastrophe models, we are providing the industry with more flexible and robust tools for underwriting, pricing new business, and managing portfolio risk. NGM will also serve as the basis for our cloud native platforms which will bring further improvements in both insurance and reinsurance workflows.”
Verisk further explained the benefits of NGM:
Risk assessment: NGM provides the industry with a more complete and accurate view of risk, resulting in enhanced estimates of technical prices, more refined differentiation of risk for sub-perils within models, and better representation of tail risk.
Policy terms and conditions: This advancement includes expanded capabilities for supporting complex insurance policy structures. These methodologies offer a more comprehensive representation of market terms and conditions, and better representation of uncertainty and geospatial dependencies in loss accumulation.
Comprehensive risk management: NGM offers a deeper understanding of uncertainty and a more comprehensive and sophisticated solution for natural catastrophe risk management. This enables insurers and reinsurers to better analyse, understand, and mitigate the impact of natural disasters on their business operations.
Financial modelling improvements: The next generation financial module in NGM delivers an accurate and reliable global view of risk across the insurance industry.
Enhanced workflows: NGM has redesigned workflows in the loss calculation to reflect policy language and the actual flow of losses more correctly into policy structures, making loss results more accurate and more reflective of reality while also making preparing and modelling risk easier.
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