AIR Worldwide’s TruExposure Enables Insurers and Reinsurers to Assess and Enhance Catastrophe Exposure Data Quality

January 1, 2011 / 4 min read

“TruExposure will help Montpelier Re make more informed pricing and underwriting decisions,” says Chris Harris, president and chief executive officer, Montpelier Re Holdings Ltd.

BOSTON, April 5, 2010 – AIR Worldwide’s TruExposure^TMData Solutions are helping companies exposed to catastrophe risk assess and enhance property-specific building characteristics needed for effective catastrophe risk analysis. Global reinsurers and U.S. insurers are using TruExposure to refine catastrophe modeling results, thereby enhancing underwriting and portfolio management decisions.

“TruExposure will provide our underwriters, analysts, and managers valuable insight into the quality of the exposure data underlying the submissions we receive,” said Tim Aman, chief risk officer, Montpelier Re Holdings Ltd. “There is enormous variability in the quality of cedants’ exposure data. TruExposure provides us with a comprehensive tool for differentiating data quality between submissions and validating internal assumptions. TruExposure not only provides an enhanced assessment of each submission but also lets us easily supplement poor exposure data with high-quality property-specific building characteristics.”

TruExposure Data Solutions, which are now available for AIR’s CLASIC/2™ software solution or as a consulting service, encompass three primary capabilities: validation, benchmarking, and augmentation.

Validation determines the completeness and reasonability of property location data, building characteristics, and replacement values within a portfolio.
Benchmarking compares exposure data within a portfolio with industry averages and distributions of insurance to value, construction, occupancy, and market share at various geographic resolutions.
Augmentation enhances property-specific building characteristics and replacement-cost estimates when data are missing or of questionable quality.

“Enhancing the quality of exposure data used for catastrophe analysis has been identified by most insurers and reinsurers as a top priority since Hurricane Katrina,” said Uday Virkud, P.E., executive vice president. “Ideally, high-quality exposure data will be captured during the insurance underwriting process and propagated through the risk transfer chain. As the industry strives to reach this goal, AIR has launched TruExposure to help insurers and reinsurers assess and enhance exposure data efficiently and cost-effectively.”

The TruExposure Data Quality Report

As reinsurers and rating agencies demand more information about the quality of exposure data used in catastrophe analysis, insurers need a way to easily communicate portfolio data quality. The TruExposure Data Quality Report provides a comprehensive overview including results from data validation, benchmarking, and augmentation in an easy-to-understand format that can be shared with internal and external audiences. TruExposure also includes reporting capabilities specific to exposure data questions in A.M. Best’s Property/Casualty Supplemental Rating Questionnaire.

“In addition to helping companies communicate exposure data quality to third parties, TruExposure can help insurers bolster existing data-quality enhancement efforts and confirm the effectiveness of underwriting strategies,” continued Virkud. “Reinsurance underwriters and analysts can leverage TruExposure to assess data quality quickly, yet comprehensively for many submissions in a short period, thus providing a cost-effective in-house alternative to more expensive data audits.”

Leveraging Powerful Data Sources

TruExposure leverages two data sources unique to AIR: AIR’s U.S. industry exposure database and TruExposure property-specific data.

The benchmarking component of TruExposure leverages AIR’s industry exposure database as a basis of comparison to better understand portfolio-specific exposure data. First developed more than 20 years ago, and updated and enhanced every year since, AIR’s industry exposure database for the United States provides a comprehensive view of aggregate exposure. The database is the basis for AIR’s industry loss estimates and underlies AIR’s CATRADER® catastrophe modeling software.

The TruExposure augmentation component leverages TruExposure property-specific data to enhance building characteristics and replacement values with modeling-ready data. TruExposure property-specific data currently includes data on approximately 65 percent of all commercial and residential buildings in the United States. The data sources are unique to ISO, and include site-surveyed building information from ProMetrix™, insurance-ready public-records data from ISO PushPin, and replacement-cost estimates from 360Value®. Property characteristics go through quality-control checks, are coded for catastrophe modeling, and are assigned a quality grade before being added to the database.

Additional TruExposure solutions include data management reviews and data preparation and cleansing, which are offered as consulting services. Data management reviews help insurers assess and enhance exposure data collection and management practices, while data preparation and cleansing can assist companies to extract, cleanse, and transform exposure data into a format suitable for catastrophe analysis.

About AIR Worldwide

AIR Worldwide (AIR) is the scientific leader and most respected provider of risk modeling software and consulting services. AIR founded the catastrophe modeling industry in 1987 and today models the risk from natural catastrophes and terrorism in more than 50 countries. More than 400 insurance, reinsurance, financial, corporate, and government clients rely on AIR software and services for catastrophe risk management, insurance-linked securities, detailed site-specific wind and seismic engineering analyses, agricultural risk management, and property replacement-cost valuation. AIR is a member of the ISO family of companies and is headquartered in Boston with additional offices in North America, Europe, and Asia. For more information, please visit www.air-worldwide.com.

Release: Immediate

Contact:
Kevin Long
AIR Worldwide
617-267-6645
klong@air-worldwide.com