5th ICRM Roundtable Matti Siitonen / Munich Re (Singapore Branch) Singapore, 28 February 2014

GEO CODING IN NAT CAT UNDERWRITING

1. Introduction to Geo Coding:

- Where are we today?

- Principles

2. Part I: CRESTA in NAT Cat Underwriting

3. Part II: NATHAN in NAT Cat Underwriting

4. Part III: RiskMapper in NAT Cat Underwriting

5. Summary

Agenda

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Beginning of Risk Modelling (Reinsurance, Consultants)

Risk Modelling of Natural Hazards intensified, after the series of winter storms in 1990 and Hurricane Andrew 1992

1990 2005 2000 1995 2010

Introduction of GIS by reinsurers: visualization and risk management of portfolios, analyses of natural disasters

Introduction of Web-Mapping- tools for the risk assessment by leading reinsurers (e.g. CatNet, NATHAN)

After 911 additional modelling of Man-made risks

Munich Re characterizes the term „Geographical Underwriting“

New services offered by brokers and consultants

Introduction of GIS-technology in the direct insurance (especially in the UK and USA)

Google Earth gives important impetus to the industry and reinforces the acceptance

A first fully integrated Geo-solution is presented in Europe

CRESTA offers a web-mapping solution to improve the transparency of portfolios

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Introduction: Geo-Technologies in the Insurance Industry Milestones of GIS (~ Geographical Information Systems)

RiskMapper

Introduction:

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Principles of Geo Coding

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1. Definitions Geo Codes: - Exact latitude - and longitude coordinates that correspond to a particular

address; - They vary in granularity; Centroid: - Geometric center (~ center point) - Different levels of Geo Coding Data: a) Rooftop and interpolated rooftop; b) Street centroid (~ center point of a street section); c) Postcode centroid (~ center point of a postcode area); d) City centroid (~ center point of a city area); e) Country centroid (~ center point of a country);

Introduction

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2. Accuracy: - Depends much on the business needs - and availability of client data

Acc

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Address Point

Street Address Interpolated

Postal Code Centroid / City Centroid

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Introduction

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Low Resolution

2 Digit ZIP Medium Resolution

5 Digit ZIP High Resolution

House Coordinates 7

Introduction

>>Structured Cedant‘s Data >> Geo Coding >> Mapping

Addresses in any spreadsheet or database can be geo coded

Munich Re Global Geo-Coder

Automatic process to attach coordinates to an address

Visualization of risk locations

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Introduction

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>>Structured Cedant‘s Data >> Geo Coding >> Mapping

City names in a spreadsheet can be geo coded

Munich Re Global Geo-Coder

Automatic process to attach coordinates to a postal code / ZIP

Visualization of risk locations

Jakarta, Indonesia

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Introduction

Part I: CRESTA

The CRESTA organization was established by the insurance and reinsurance industry in 1977 as an independent body that aims to provide a uniform standard for data accumulation control of natural hazards worldwide;

CRESTA stands for Catastrophe Risk Evaluating and Standardizing Target Accumulations and is currently managed by Munich Re and Swiss Re;

The CRESTA online platform is available to users free of charge at www.CRESTA.org;

The CRESTA Secretariat is responsible for the administration of the CRESTA online platform, users and the communication with users as well as the incorporation of new data and features;

The management of the CRESTA secretariat alternates between Munich Re and Swiss Re. As of January of 2013, Munich Re heads the CRESTA secretariat and will do so for the next five (5) years;

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Part 1: CRESTA: Purpose and main tasks

Enable users to analyze their exposure data on digital maps. Users can decide on the regional level on which they wish to accumulate and visualize their data;

Determine country-specific zones for the uniform and detailed reporting of exposure data, usually relating to natural hazards;

Promote templates to exchange exposure data in the industry based on the ACORD standard;

Provide zoning list templates for the insurance industry;

Develop new features – e.g., CRESTA zone look-up using coordinates;

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https://www.cresta.org/

Part 1: The 2013 CRESTA Zones: - What’s new and better?

Choice of two levels of detail: “HighRes” for risk modeling and data exchange, and “LowRes” for cumulative risk analyses and reporting;

The CRESTA database now contains 49 additional countries, making it the most comprehensive risk mapping tool available online;

Zones are now always based on postal and administrative boundaries. The hazard-based schemes have been replaced;

More detailed analyses possible thanks to more than 250,000 zones worldwide (compared to 43,000 zones previously);

New CRESTA Zone look-up feature using the coordinates of your insured risks;

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Part I: CRESTA: Overview on Functions

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Part 1: CRESTA: LowRes: visualize TSI

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Part I: CRESTA: HighRes: visualize TSI

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Part I: CRESTA Report

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Part I: CRESTA Report

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Part I: CRESTA - Key Benefits

Free access to an uniform and global standard to exchange aggregated exposure data for accumulation risk control and modeling;

Accumulation control of global exposures for modeled and non-modeled countries;

Possibility to explore exposures with two (2) levels of detail on a map;

Understand and benchmark portfolios against the market;

Improve the quality of exposure data and accumulation risk control capability;

Enhanced exposure analytics for property, engineering and marine (static) NatCat business;

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Part II: NATHAN

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Part II: NATHAN Risk Suite benefits NATural Hazard Assessment Network

NATHAN Online supports clients with interactive and visual tools to quantify and assess NatCat risks around the globe. The only requirement is registration on Munich Re’s client portal (connect.munichre.com).

NATHAN benefits for clients:

Display an interactive map containing own data (--> portfolio upload) => Increasing portfolio transparency by risk visualization

All insured natural hazards included: Earthquake, Volcano, Tsunami, Tropical Cyclone, Tornado, Winter storm, Storm surge, Riverflood, Hailstorm => Increasing portfolio profitability by multi hazard evaluation

Any location worldwide can be assessed on the basis of global coverage => Time/cost savings, standardized global data for consistent risk approach

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Part II: NATHAN Single Risk Online Risk Assessment for Jakarta

Source: Esri, DigitalGlobe, GeoEye, i-cubed, USDA, USGS, AEX, Getmapping,, Aerogrid, IGN, IGP, swisstopo, and the GIS User Community

search location by Country City Full address coordinates

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Part II: NATHAN Update Pop-up Windows

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Part II: NATHAN Single Risk Online NATHAN Single Risk Assessment PDF Report

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Part II: NATHAN Portfolio Risk Online Result: NATHAN Portfolio Risk Assessment Report

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NATHAN benefits

Exclusive access to Munich Re’s high-quality natural hazard zoning system;

NatCat rating of single and portfolio risks worldwide;

Increased risk transparency and accumulation control capability;

Improved underwriting quality and portfolio profitability;

Efficiency/costs (automation and standardization versus manual work);

Guaranteed data security;

Easy integration into existing workflows;

Part II: NATHAN - Key take-aways

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Part II: NATHAN Risk Suite tools NATural Hazards Assessement Network

NATHAN Risk Suite

NATHAN World Map of Natural Hazards

NATHAN Globe of Natural Hazards

(DVD)

NATHAN Single Risk

Online

NATHAN Portfolio

Risk Online

NATHAN Portfolio

Risk Pro

NATHAN Risk

Consulting

• NATHAN World Map of Natural Hazards

The wall map illustrates the natural hazards distribution.

• NATHAN Globe of Natural Hazards (DVD) The offline tool provides NatCat risk assessment for single risks on city level.

• NATHAN Single Risk and Portfolio Risk

Online The online tool supplies NatCat risk assessment for single and portfolio risk on address level via Munich Re’s client portal.

• NATHAN Portfolio Risk Pro is the premium

service for NatCat portfolio risk assessment tailored into clients’ interface.

• NATHAN Risk Consulting: personal expert know how to help introducing geointelligence at clients’ site.

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Part III: RiskMapper: A mapping solution for location intelligence and analytics

RiskMapper: an interactive, real-time, flexible and visually appealing web application for global natural hazard risk assessment within the non-life insurance business;

The RiskMapper allows the underwriters to:

Upload and visualize their individual risks (both facultative and treaty portfolio data);

Search for features or attributes in (geographic) data and display the results;

Geo-code points of interest and display the results in real-time;

Apply further spatial analyses (e.g. surface profiles and area calculations);

Search and track key risk exposures;

Identify peak-exposure concentrations (~ Hot Spots);

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Part III: RiskMapper: The data dashboard

The RiskMapper allows to combine many underwriting information:

Client portfolio data (e.g. industrial sites);

Munich Re’s NATHAN hazard maps;

Event footprints and real-time catastrophe services;

Critical infrastructures (e.g. nuclear power plants, dams);

Business relevant industries (e.g. semiconductors, automotive);

Hot Spots (> 1,100 industrial parks with locations identified in Asia);

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Part III: RiskMapper – Example

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Part III: RiskMapper – Example

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Part III: RiskMapper – Example

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Part III: RiskMapper – Example

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Part III: RiskMapper – Example

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Part III: RiskMapper – Example

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Part III: RiskMapper – Example

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Part III: RiskMapper: Some user benefits

The RiskMapper allows:

To be used irrespective of where the exposures are written and it is available all over the world;

Improve risk transparency;

Highlight not yet identified or sufficiently analyzed exposures;

Detect “clusters” or other critical geographical features in portfolios;

Faster post-event reporting and analysis;

Design more appropriate (re-)insurance structure;

Better exposure accumulation analysis;

Keeping track on risks for multinational companies / locations worldwide;

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Benefits on Enhancing Exposure Data (~ Geo Coding):

1) Improves Risk Identification: “Unknown” Accumulations, Multi-locations, “White Spots”;

2) Improves Risk Assessment and Distance Analysis (~ Underwriting Quality and Portfolio Profitability can be increased);

3) NatCat Rating of Single and Portfolio Risks Worldwide;

4) Enhances Modeling Quality (~ usable for model calibration);

5) Enhances Market - / Portfolio Loss Estimations (~ Post Event);

6) Efficiency / Costs (~ Automation and Standardization);

7) Easy Integration into existing workflows;

Summary

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THANK YOU FOR YOUR ATTENTION !

Matti Siitonen / Munich Re, Singapore Branch

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