New Cat Loss Data Firm Launched For Europe

Perils AG, a new independent Zurich-based company with eight major firms as stakeholders, said late this year it should begin offering data on European winter storm exposures and insured losses.

The company, which expects to announce a chief executive officer shortly and employ four or five staff, said it will aggregate and provide industrywide European catastrophe insurance data as a subscription service.

Perils said aggregated data sets will be derived from data voluntarily provided by European-based insurers and its founding shareholders include: Allianz, AXA, Groupama, Guy Carpenter, Munich Re, PartnerRe, Swiss Re and Zurich.

Each company holds equal equity in Perils, which will provide two main products to subscribers which the firm said are likely to include insurers, reinsurers, brokers, risk modelers, banks and other insurance industry stakeholders.

The two products are:

o Aggregated industrywide insurance exposure data (insured values), which will be catalogued by risk type and CRESTA zones (defined European geographical zones for natural catastrophe insurance). The data will be provided on an annual basis.

o Industry loss estimates per risk type and CRESTA (Catastrophe Risk Evaluation and Standardizing Target Accumulations) zones, following large natural catastrophe events.

Perils said it expects the industry exposure data and loss information will have significant value to subscribers, by improving the understanding of the potential frequency and severity of natural catastrophes at various magnitudes and the information will in turn aid in the risk management and underwriting of natural catastrophe risk.

The combination of consistent industry exposure portfolio data and corresponding event loss information is likely to enhance the modeling of natural catastrophe risk, said Perils.

It added that greater transparency surrounding industry losses is likely to further facilitate the establishment of accurate and robust loss triggers for catastrophe bond structures, industry loss warranties (ILWs) and other capital markets products.

The company said its loss estimates will be a product for the insurance-linked securities (ILS) sector and will improve insurers' and reinsurers' abilities to seek further capacity for peak European natural catastrophe risk.

Perils said it has a governance structure established to ensure significant industry independence. Both subscriber and shareholder representatives will serve on the board of the company to ensure that a broad spectrum of insurance and reinsurance interests are fully served.

Data integrity and the confidentiality of data provided by insurers will be maintained through infrastructure and aggregation processes, as well as contractual provisions for data confidentiality, Perils explained.

The ongoing success of Perils, the company said, is dependent on broad industry participation in providing exposure and loss information. Perils will initially provide industrywide exposure and loss information exclusively on European wind risk (winter storms) and expand to include other risks in the future.

Perils said after becoming fully operational at the end of this year it will focus initially on Belgium, Denmark, France, Germany, Holland, Ireland, Luxembourg, Switzerland and the UK with expansion into other European countries anticipated for next year.

A company spokesman said that once Perils gets rolling the firm envisions more stakeholders getting involved.