The State of Climate Science and Insurance Modeling Identifying - - PowerPoint PPT Presentation

the state of climate science and insurance modeling
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The State of Climate Science and Insurance Modeling Identifying - - PowerPoint PPT Presentation

The State of Climate Science and Insurance Modeling Identifying Risk, Certainty and Insurance Implications Prepared by Aon Public Sector Presentation to Center for Law, Energy & the Environment Recent Losses United States May 2018 Date


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Prepared by Aon

Public Sector

Presentation to Center for Law, Energy & the Environment

The State of Climate Science and Insurance Modeling

Identifying Risk, Certainty and Insurance Implications

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SLIDE 2

Public Sector Proprietary & Confidential | 06.14.2018

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Recent Losses

United States

Source: Aon Impact Forecasting

May 2018

Date Event Location Deaths Structures/Claims Economic Loss (USD) 04/30-05/03 Severe Weather Plains, Midwest 100,000+ 950+ million 05/03-06/07 Volcano Hawaii Hundreds+ Millions 05/12-05/16 Severe Weather Rockies, Plains, Midwest, Northeast 5 115,000+ 1.4+ billion 05/13-05/15 Flooding Florida Hundreds Millions 05/19-05/20 Severe Weather Plains, Midwest Thousands 100+ million 05/26-06/01 Severe Weather Rockies, Plains, Midwest, Mid-Atlantic 1 Thousands 100s of Millions 05/27-05/28 Flooding Maryland 1 Thousands 10s of Millions+ 05/27-05/30 STS Alberto Southeast, Midwest 5 Thousands Millions+

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Public Sector Proprietary & Confidential | 06.14.2018

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Recent Losses

California

Source: Aon Impact Forecasting

2018 Year to Date

Date Event Location Deaths Structures/Claims Economic Loss (USD) 01/08-01/09 Flooding California 21 6,500+ 850+ million 03/21-03/22 Flooding California Hundreds Millions

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Public Sector Proprietary & Confidential | 06.14.2018

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Record Issuances of Cat Bonds

Catastrophe Bond Issuances by Quarter

Source: Aon Securities

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Public Sector Proprietary & Confidential | 06.14.2018

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Role of Risk Modeling in Risk Transfer Solutions

Stochastic Modeling Model Development Marketing Post Event Recovery

  • Explain the data

sources and models used to the markets

  • Review / acquire

historical data and client specific information

  • Review existing

models, if available

  • Develop a solution

designed for target risk and geography

  • Fit probability

distributions for underlying input variables

  • Perform simulation

based on probability distributions

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Public Sector Proprietary & Confidential | 06.14.2018

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Data Collection

  • Claims vs losses
  • Real time information
  • New technologies
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Public Sector Proprietary & Confidential | 06.14.2018

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Data Quality

  • Values
  • Level of Detail
  • Consistency of inputs
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SLIDE 8

Public Sector Proprietary & Confidential | 06.14.2018

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New Solutions

  • More sophisticated approach to risk management

– Criticality – Infrastructure Networks – Capital Expenditures – Policy Decisions