JERSEY CITY, N.J., December 14, 2023 — PCS, a business unit of Verisk, (Nasdaq: VRSK), a leading global data analytics and technology provider, has announced the expansion of its Global Terror Index to include SRCC (Strikes, Riots, Civil Commotions, and Civil Unrest) to help enhance the understanding and management of political violence risks in the (re)insurance market. The SRCC enhancement will provide insurers and reinsurers with robust data to assess and quantify the risks associated with civil unrest.
With the number of SRCC events on the rise, insurers and reinsurers must ensure they accurately assess historical and current loss data for these types of perils. This SRCC enhancement provides a systematic way to measure the frequency and severity of these events. Additional uses of the product include reinsurance and alternative risk-transfer transactions, such as industry loss warranties (ILWs), an area where the need for a loss aggregation service has been evident.
“PCS has identified over $10 billion in industry wide SRCC losses across 20 events dating back to 2010, compared to less than a billion on the terror side,” said Ted Gregory, head of global PCS operations at Verisk. “This significant disparity highlights the need for a robust index that reflects the growing severity and frequency of SRCC events. By expanding the view of global political violence, PCS has developed an index that will help enable the market to trade SRCC on a standardized platform with an established methodology."
Insured losses linked to major bouts of unrest have reached new highs in recent years, with SRCC risks rising in more than 50 percent of countries over the last 12 months, according to Verisk Maplecroft.
Some reinsurers have observed these losses and are evaluating tools to support additional capacity and monitor this risk. The SRCC enhancement can help benefit insurers, reinsurers, and other stakeholders in gaining additional capacity from capital sources. By highlighting regions where the demand for their products is increasing, stakeholders can tailor offerings more effectively. Additionally, tracking changes in the index over time can enable various markets to identify trends in civil unrest events.
Multinational brands, retailers, and banks will also likely find value in the SRCC enhancement for financial and contingency planning purposes. By utilizing the index, these companies can help ensure they have the appropriate risk mitigation strategies in place to protect their operations and assets in various parts of the world.
Alex Mican, head of PCS global strategy and growth at Verisk, emphasized the importance of the SRCC enhancement in the evolving (re)insurance market. He stated, "The existing global terror (re)insurance market is small, but there’s a widespread view that it will grow significantly over the next decade. However, some structural changes are needed to facilitate its development. One important development will be the further entry of capital markets capacity to provide both reinsurance and retrocessional protection for companies assuming SRCC risk."
Verisk’s PCS remains committed to providing innovative solutions that can help address the evolving needs of the (re)insurance market. The development of the SRCC enhancement is a testament to our dedication to enhancing risk management practices and supporting informed decision-making.
Apart from Verisk PCS Global Terror product with the SRCC enhancement, Verisk offers the industry an expanding suite of sustainability and resilience exposure analytics through Verisk Maplecroft including global geospatial datasets covering the full spectrum of ESG and political risks and political violence.
###
About Verisk
Verisk (Nasdaq: VRSK) is a leading strategic data analytics and technology partner to the global insurance industry. It empowers clients to strengthen operating efficiency, improve underwriting and claims outcomes, combat fraud and make informed decisions about global risks, including climate change, extreme events, ESG and political issues. Through advanced data analytics, software, scientific research and deep industry knowledge, Verisk helps build global resilience for individuals, communities and businesses. With teams across more than 20 countries, Verisk consistently earns certification by Great Place to Work and fosters an inclusive culture where all team members feel they belong. For more, visit Verisk.com and the Verisk Newsroom.
Media contact
Mary Keller
Verisk
617-954-1754
mary.keller@verisk.com