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October 17th - 19th,
1999
"Technology Changes Lead to Changes in
Clark told A.M. Best Co.'s 12th annual Insurance Information and Technology Conference in Baltimore that her 12- year-old business first employed a mainframe-based analysis to inform reinsurance companies, reinsurance intermediaries and primary companies of their estimated loss costs in the event of natural catastrophes such as hurricanes, earthquakes and tornadoes. The company progressed to a workstation, then a personal computer-based risk assessment management system. Currently, it is exploring Internet-based applications. For example, its data standards program, Unicede, allows transfer of property exposure information to underwriters anywhere in the world. "Companies can actually send data over the Internet to have it checked. Then the data can be sent back to them," Clark said.
Clark said her company is working on a new underwriting system, AIRe, that would provide forecasting and calculating claims as a real-time process over the Internet. This would simulate hundreds of possible scenarios where losses could occur. She used the example of the recent Hurricane Floyd to show how the system would give estimated losses by ZIP code as a powerful storm moved up the Florida coast. Her competitor, Hemant Shah, co-founder and senior vice president of Risk Management Solutions Inc., Menlo Park, Calif., also addressed the A.M. Best conference. Founded at Stamford University in 1988, RMS provides products and services for the quantification and management of risk. Shah said his company has been working on a new catastrophe-modeling system, Riskbrowser, for 30 months now and has quietly rolled it out to a few companies. It features Web-based architecture, a client web browser and Microsoft Web-server technology. Ultimately, this system, which RMS calls an "end-to-end risk management solution," routes all collected information on risk exposures back to the underwriter for decision-making. Shah said that Zurich, one of the top commercial lines-insurers in the world, is integrating Riskbrowser into its corporate-wide property underwriting system to perform loss modeling and hazard lookups on all major account submissions. Another test company, General Re, has been using it to analyze every submission it receives to determine flood zone, ground shaking intensity, liquefaction and landslide potential, and distance to the coast. General Re, one of the largest reinsurers in the world, processes as many as 4,000 such submissions every day, Shah said. By Barbara Bowers |
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The E-Oriented Model for Catastrophe
Risk: 
The evolution of technology has led to
dramatic changes in the way catastrophe risk modeling can be delivered to
clients, said Karen M. Clark, founder and president of Applied Insurance
Research Inc., a Boston-based firm specializing in catastrophe risk assessment
and management.
Through desktop underwriting applications of catastrophe risk
modeling, underwriters can put very detailed information into the system--the
latitude and longitude of the property; its replacement value; structural
irregularities--that allow them to identify risk exposure down to the individual
or policy level, Clark said.