Tag Archives: Location Intelligence API

RMS Location Intelligence API: Underwriting with 20/20 Vision

This is a taster of an article published in the latest edition of EXPOSURE magazine featuring the RMS Location Intelligence API. For the full article click here or visit the EXPOSURE website.

The insurance industry boasts some of the most sophisticated modeling capabilities in the world. And yet the average property underwriter does not have access to the kind of predictive tools that carriers use at a portfolio level to manage risk aggregation, streamline reinsurance buying and optimize capitalization.

Detailed probabilistic models are employed on large and complex corporate and industrial portfolios. But underwriters of high-volume business are usually left to rate risks with only a partial view of the risk characteristics at individual locations, and without the help of models and other tools.

Many insurers invest in modeling post-bind in order to understand risk aggregation in their portfolios, but Ross Franklin, senior director of data product management at RMS, suggests this is too late. “From an underwriting standpoint, that’s after the horse has bolted — that insight is needed upfront when you are deciding whether to write and at what price.”

By not seeing the full picture, he explains, underwriters are often making decisions with a completely different view of risk from the portfolio managers in their own company. “Right now, there is a disconnect in the analytics used when risks are being underwritten and those used downstream as these same risks move through to the portfolio.”

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EXPOSURE Magazine: Exploring the World of Risk Management

With the start of the U.S. wildfire season on the horizon, in the latest edition of EXPOSURE – the RMS magazine for risk management professionals, wildfire is our lead story, as we examine whether it now needs to be considered a peak peril. The 2017 and 2018 California wildfires have forced one of the biggest re-evaluations of a natural peril since Hurricane Andrew in 1992, as the industry begins to comprehend the potential loss severities.

The article argues that there are similarities with U.S. wildfire as there was with North Atlantic hurricane in 1992 – catastrophe models were relatively new and had not gained market-wide adoption, and many organizations were not systematically monitoring and limiting large accumulation exposure in high-risk areas. Find out why a rethink is required about how the risk management industry currently analyzes the exposure and the tools it uses.

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Exceedance: The Times They Are a Changin’

The opening keynote at Exceedance clearly set the agenda for this year’s conference – the future of risk. Karen White, chief executive officer for RMS, in her opening address, summarized the state of the risk management industry with one of her favorite songs – it just had to be David Bowie and “Changes”. But Karen asked what’s driving these changes, how do our clients see change, and how are they responding? Karen outlined how she had travelled the globe, (and clocked up hundreds of thousands of United MileagePlus points), talking to clients to get a clear-eyed view of what has changed and what to do about it.

Karen discovered that the catalysts for change had come from a wide range of sources, from how bad surprises are becoming, how new opportunities are motivating change, and how technology is changing approaches to risk. And it is a poignant time for RMS to look to the future of risk, as we celebrate and reflect on thirty years in business this year – and the birth of the nat cat modeling industry in 1989. Change has been constant in thirty years, but is now accelerating ahead, as Karen remarked that the next five years will define the future of risk.

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