Preparing for the U.S. hurricane season with real-time event response

10 May 2021

In the case of U.S. hurricanes such as Irma or Laura, is your organization able to gain an understanding of the hurricane’s impact across all of its business units and all lines of business? Do you know how many properties you have within the cone of uncertainty? How about in the case of real-time events such as an earthquake; can you quantify the expected impact to your exposure at that location?

Verisk is excited to introduce a new solution to help your organization address these challenges and manage real-time event response like never before. Enterprise Exposure Manager™ is a scalable, cloud-native solution that enables (re)insurers to evaluate enterprise-wide risk across billions of locations, providing an improved understanding of their global exposures and insights during real-time events. Developed in collaboration, Enterprise Exposure Manager integrates Sequel’s market-leading exposure management capabilities with AIR’s best-in-class analytics and Analyze Re’s high-performing modeling engine to bring you a brand new, comprehensive solution to empower enterprise-level decision-making.

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Unforeseen events

Some natural catastrophe events—such as an earthquake —simply cannot be anticipated. Once an earthquake has occurred, however, your organization may face the painstaking task of trying to understand which treaty portfolios and how much exposure has been impacted, and what losses they could potentially be facing.

As we explored in our first article, Enterprise Exposure Manager is a cloud-based solution that offers a central warehouse for your data with virtually unlimited capacity, offering a secure and easy way to access the information you need to run real-time event analyses. With real-time data, analytics and dashboards, you can quickly survey an overview of your exposure in the area where the earthquake occurred. Encapsulate this area by creating a custom geographic zone by a pre-determined boundary, such as state, county or ZIP Code, or leverage the drawing tool to create an area of your own. You have the option to apply user-defined damage ratios, and then see the entire expected impact to all of the enterprise’s exposure for that area, taking into consideration the financial terms.

Developing events

Unlike earthquakes, hurricanes form and develop over time, allowing for preparation and loss estimation leading up to landfall. Similar to the previous example, you still have the opportunity to leverage the functionality of creating custom geographic zones by pre-determined boundaries or by using the drawing tool. For example, you may choose to leverage the drawing tool to create a zone such as the National Hurricane Center’s cone of uncertainty and overlay that on the locations of your exposures. By applying user-defined damage ratios on that area, you can quickly see the estimated impact of the event on your exposure. You can also leverage a range of damage ratios to reflect the category of the hurricane, for example use a lower damage ratio to reflect a Category 3 hurricane or a maximum loss damage ratio to reflect a Category 5 hurricane.

Leverage AIR’s real-time event response solutions

Obtaining reliable information as catastrophes unfold or immediately after they occur is essential for (re)insurers and investors. Regardless of the event type, Enterprise Exposure Manager has an automated data feed from AIR’s real-time event response solution, ALERT™ (AIR Loss Estimates in Real Time). With zero-touch event response, you can automatically view the event footprint provided by ALERT and quickly analyze the potential impact to your exposure. Not only does ALERT provide up-to-date information and loss estimates for major catastrophes worldwide but the event footprints also include intensity bands, making it even more accurate than the user-defined damage ratios. For example, if you leverage the event footprint for an earthquake event, you can also see the bands of shake intensity applied to your exposure data.

Depending upon the severity of the event, ALERT also provides similar stochastic event IDs (SSEs) from stochastic catalogs created for AIR’s tropical cyclone and earthquake models. SSEs allow you to identify events that share important characteristics with actual storms and can help you understand the broad range of impacts possible as a tropical cyclone approaches. SSEs also provide you with quick access to modeled losses for your at-risk exposures; help you anticipate future claims and plan for effective event response; and enable you to understand your potential risk by estimating the total exposure at risk for each simulated storm by using the event footprints.

map Enterprise Exposure Manager is also integrated with AIR’s Catalog Viewer, a web-based analytics platform that helps clients evaluate and manage tropical cyclone risk as it unfolds in real time. Not only does this integration allow you to view the SSEs provided by ALERT and ingest the latest National Hurricane Center advisories, it also grants you access to AIR’s extensive catalog of stochastic events so you can select your own custom sets of SSEs. Each SSE features the full storm track and access to premium data sets such as hourly point data and intensity footprints (Figure 1.) For example, to better visualize the extent of a potential wind field, you can select any SSE in our 10K tropical cyclone catalogs and view its wind intensity footprint. You can then export these events into Touchstone® to evaluate your potential losses. With Catalog Viewer, you can leverage a range of SSEs to reflect your own view of the tropical cyclone risk as well as reflect a range of potential outcomes from a developing system.

Enterprise-wide real-time event response

Real-time event response data helps keep companies well informed at critical times, allowing you to communicate effectively within your organization and set expectations for investors. The real-time loss estimates can help you determine if your organization’s reinsurance is adequate, and the highly localized information allows insurers to effectively deploy claims resources. During extreme events, Enterprise Exposure Manager offers the ability to quickly understand the potential risk to your exposure across all of your business units and lines of business.

Learn more about how Enterprise Exposure Manager can help your organization.