The suite of over 100 models promises to revolutionise how insurers and reinsurers evaluate risk worldwide, boasting a novel financial modeling framework engineered to provide more precise estimations of insured losses from extreme events.
Verisk’s Extreme Event Solutions business spearheaded these developments, which are now accessible through Verisk’s cutting-edge catastrophe risk management software platform, Touchstone. Notably, Touchstone is used by the top ten US P&C insurers and nine of the top ten global P&C insurers, underscoring its significance within the industry.
This unveiling represents a significant milestone, marking the first instance where a catastrophe modeling firm has successfully transitioned its entire model suite to a next-generation framework. Verisk’s NGM is poised to redefine industry standards for risk assessment, equipping insurers and reinsurers with the necessary tools to make well-informed decisions and effectively mitigate potential losses. This initiative underscores Verisk’s commitment to fostering innovation and bolstering resilience within the insurance sector.
The advantages of Verisk’s NGM are manifold:
Enhanced Risk Assessment: NGM offers the industry a more comprehensive and precise understanding of risk, resulting in improved estimates of technical prices, refined differentiation of risk for sub-perils within models, and more accurate representation of tail risk.
Policy Terms and Conditions: NGM incorporates expanded capabilities to support complex insurance policy structures, providing a comprehensive depiction of market terms and conditions, along with better representation of uncertainty and geospatial dependencies in loss accumulation.
Comprehensive Risk Management: NGM facilitates a deeper understanding of uncertainty and offers a sophisticated solution for natural catastrophe risk management, empowering insurers and reinsurers to better analyze, comprehend, and mitigate the impact of natural disasters on their business operations.
Financial Modeling Improvements: The next-generation financial module within NGM furnishes an accurate and reliable global perspective of risk across the insurance industry.
Streamlined Workflows: NGM has revamped workflows in loss calculation to accurately reflect policy language and the flow of losses into policy structures, thereby enhancing the accuracy of loss results and simplifying risk modeling.
According to Verisk, catastrophe models play a pivotal role in decision-making within today’s dynamic risk landscape in the insurance market. Verisk’s Touchstone and newly unveiled Next Generation Models provide insurers and reinsurers with state-of-the-art resources to assess and price intricate risks effectively, as well as fine-tune reinsurance strategies for risk transfer.
The enhanced financial framework accommodates complex policy terms and models uncertainty, facilitated by streamlined exposure coding and more efficient workflows. The insights derived from these models empower better-informed decision-making and enable effective management of inherent risks in portfolios.
“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, president of Extreme Event Solutions at Verisk.
He continued: “The insurance industry is evolving, creating new and innovative methods for writing policies in a more complex risk environment. By rebuilding the financial modeling 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.”
Newbold added: “NGM will also serve as the basis for our cloud native platforms which will bring further improvements in both insurance and reinsurance workflows.”
The Verisk Hurricane Model for the U.S. available as part of NGM has been approved for filing in Florida.
