Munich Re, Swiss Re, PartnerRe and Guy Carpenter among shareholders in PERILS
New catastrophe data company PERILS has been officially announced, following exclusive news of its formation in Global Reinsurance in December 2008.
PERILS AG, an independent Zurich-based company, will aggregate and distribute natural catastrophe data for the European insurance industry. It has been created by founding shareholders Allianz, AXA, Groupama, Guy Carpenter, Munich Re, PartnerRe, Swiss Re and Zurich. Each company holds equal equity in the company.
The aggregated data sets, issued as a subscription service, will be derived from information voluntarily provided by European-based insurers.
PERILS will provide two main products to subscribers which are likely to include insurers, reinsurers, brokers, risk modellers, banks and other insurance industry stakeholders. These two products are: 1. Aggregated industry-wide 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; 2. Industry loss estimates per risk type and CRESTA zones, following large natural catastrophe events.
PERILS 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. This information will in turn aid in the risk management and underwriting of natural catastrophe risk. Overall, the combination of consistent industry exposure portfolio data and corresponding event loss information is likely to enhance the modelling of natural catastrophe risk.
Greater transparency surrounding industry losses is expected to further facilitate the establishment of accurate and robust loss triggers for catastrophe bond structures, industry loss warranties (ILWs) and other capital markets products. PERILS’s loss estimates will aid the insurance-linked securities (ILS) sector and will allow insurers and reinsurers to seek further capacity for peak European natural catastrophe risk.
A statement from the new company said: “PERILS is an industry-wide initiative with 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. Furthermore, data integrity and the confidentiality of data provided by insurers will be maintained through sound infrastructure and aggregation processes, as well as contractual provisions for data confidentiality.
“The ongoing success of PERILS is dependent on broad industry participation in providing exposure and loss information. PERILS will initially provide industry-wide exposure and loss information exclusively on European wind risk (winter storms), and expand to include other perils in the future.”
PERILS aims to be fully operational in the latter half of 2009, focusing initially on Belgium, Denmark, France, Germany, the Netherlands, Ireland, Luxembourg, Switzerland and the UK. Expansion to other European countries is anticipated to follow in 2010.