Karen Clark & Company (KCC, Boston), a catastrophe risk advisory firm, has released RiskInsight, an enterprise risk management platform.
The company says that RiskInsight has an open architecture that "enables insurance and reinsurance companies to efficiently utilize the knowledge of multiple internal and external experts in building their proprietary views of risk." Event intensity footprints, damage functions and other components of the platform are transparent to the user.
"Building a proprietary view of risk has become more important than ever after recent model updates and surprise events," said Karen Clark, CEO, KCC. "Companies want a more open platform that enables them to utilize the scientific and engineering expertise of many organizations conducting state-of-the-art research around the world. RiskInsight delivers that platform and enables the most sophisticated companies to efficiently integrate these valuable views into their day-to-day decision making."
[Read why Clark thinks CAT models might be overused.]
RiskInsight featured mapping and graphing capabilities to help companies analyze their global exposures and risk concentrations. It also features exposure analytics tools that can handle different types of event footprints and superimpose these footprints on detailed policy- and location-level exposure data. Insured losses are estimated using damage functions by construction and occupancy, and by applying secondary uncertainty through a loss calculator.
"We are heavy model users, but we value alternative approaches and tools that help us come to our own conclusions about our loss potential," commented Nicolas Papadopoulo, President and CEO, Arch Reinsurance Ltd., in a statement. "RiskInsight provides some unique perspectives and information that complement and enhance our internal pricing and management analytics."
"RiskInsight is not a competitor to or a replacement for the catastrophe models," added Glen Daraskevich, SVP, KCC. "On the contrary, RiskInsight helps companies test the model results and choose the output that is most credible for their unique books of business--a best practice we use heavily in our consulting engagements."
RiskInsight incorporates default 100-, 250- and 500-year wind footprints for U.S. hurricanes along with damage functions by construction, occupancy, year built, and region. These footprints and damage functions are developed using the same data and information underlying the catastrophe models and are included to provide intuitive and consistent benchmarks for monitoring changes over time and can be readily peer-reviewed by outside experts. The goal is to complement what companies get from the models and provide new perspectives and capabilities.
"While we highly value the catastrophe model output, we have long wanted a tool that enables us to monitor our exposures with a comprehensive and consistent set of hurricane scenarios," added Locke Burt, President, Security First Insurance Company, in the release. "RiskInsight provides unique visibility into the relationship between our portfolio and loss potential and an efficient platform for evaluating alternative strategies and growth opportunities."