GEO-INTELLIGENCE IN THE INSURANCE INDUSTRY -

NATHAN RISK SUITE

Andreas Siebert

Head of Geospatial Solutions

12th Aquaculture Insurance & Risk Management Conference

Kinsale, Cork, March 2011

Agenda

1. Geo-Intelligence in the insurance industry

� Geographical Information Systems (GIS)

� Value chain

2. Geo-Intelligence in risk management

� Risk identification and mapping

� Risk modelling and accumulation control

3. Solution for aquaculture insurance

� Fishfarm Information System (FIS)

4. Solutions for NatCat risk management

� NATHAN Risk Suite

5. Q & A

GEO-INTELLIGENCE IN THE INSURANCE BUSINESS

Geo-Intelligence is based on Geographic Information Systems (GIS)

A Geographic Information System (GIS) allows us to

organize, analyze, and display

geographically referenced data in the form of

maps, tabular data or reports

and thus helps us to make intelligent use of the geo information and to reveal important information like spatial relationships or trends.

2-digit ZIP

codeNumber

of risks Sum insured EUR

7978

7277

76

7571

70

74

73Connectingmaps and databases

7 97 8

7 27 7

7 6

7 57 1

7 0

7 4

7 3Sum insured< 50 m €50 – 100 m €> 100 m €

Principles of GISMultiple geocoded data sources improving risk transparency

Claims and event information

GIStechnology

Statistics (e.g. production data

Aerial and satellite imagery

Hazard data

Improved risk transparency

Post codes

Number of

risks

Sum insured

(EUR)

Insurance data(liabilities distribution)

Geocoding-tools(e.g. GPS)

Claims and event information

Statistics (e.g. production data)

Aerial and satellite imagery

Hazard data

Product

development

Sales andmarketing

Riskmanagement

Claims management

Client management

and services

Riskidentification

Riskassessment

Modelling, Pricing

Riskcommunication

Value chain in the insurance industry

Re-Insurance

10%

50%

10%

30%Product development

Sales and marketing

Risk management

Claims management

Client managment

10%

40%

30%

10%

10%

Product development

Sales and marketing

Risk management

Claims management

Client managment

Primary Insurance

Geo-information is used in many business processes with different focuses in

2000

2010

Use of Geo-Intelligence in different lines of business

80%

5%10%

5% property insurance

life / health

liability (motor vehicle, environment)transport

energy / engineering

50%

10%

20%

10%

10%property insurance

life / health

liability (motor vehicle, environment)transport

energy / engineering

GEO-INTELLIGENCE IN THE RISK MANAGEMENT

Global natural catastrophes 1980 – 2009Increase in number of events

Risk Identification

Geospatial assessment of portfolios (worldwide scale)

Geospatial assessment of portfolios (countrywide scale)

Risk Identification

Risk Identification

Geospatial assessment of portfolios (local scale)

Risk Assessment

Global hazard assessment (tsunami zones) of exposed locations

Risk Assessment

Detailed storm surge maps (local resolution)

Quantitative assessment of exposed risk locations

Quantitative evaluation

of exposed locations

EQ Locations Sum PD TSI

Zone 0 120 7.163.044.720

Zone 1 70 3.970.989.382

Zone 2 43 1.849.545.546

Zone 3 17 556.629.741

Zone 4 4 7.922.628

Sum 254 13.548.132.017

Risk Evaluation

Risk = F (Hazard, Vulnerability, Exposed Values)

Modelling, Pricing

Set ofscenarios

Expected loss / loss occurrenceprobability

Risk curveIndividual

exposure

Hazard information

Exposure distribution

Vulnerability functions

SOLUTION FOR AQUACULTURE INSURANCE

FISHFARM INFORMATION SYSTEM (FIS)

Motivation

Nowadays sustainable aquaculture risk management requires

� Effective data and portfolio management (incl. accumulation control)

� A solid understanding of the underlying spatial dimension, since fisheries and

aquaculture are fundamentally spatially distributed

With FIS a tool is provided for

� Portfolio and data management

� Accumulation control

� Mapping aquatic resources, fishfarms, etc.,

which supports decision making and increases risk transparency.

Fishfarm Information System

Portfolio Management

Support for the Underwriter:

� easy to use (predefined forms) on Microsoft Excel basis

� data consistency checks

� inclusion of natural hazard information (source by Munich Re)

� automatic currency conversion

� automatic concern line check

Accumulation Control

� Every site is assigned to one area

� All values are stored in the same currency

� All data is stored in one database resp. sheet

� export to Google Earth to visualize the whole portfolio

More transparency

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

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Country data for Spain in 2008, currency: GBP

Maximum

Concern Value

Max. Exposure

Improved risk transparency by mapping with Google Earth or similar solutions

SOLUTIONS FOR NATCAT RISK MANAGEMENT

NATHAN RISK SUITE

1978 / 1988 / 1998 / 2009 / 2011 2000 / 2004 / 2009 / 2011

1989 / 1999 2001 / 2005 / 20102002 / 2010 / 2011

Geo Services: From print products to online toolsWorld Map, Globe, CD-ROM, DVD, NATHAN

All geo services will help your clients to carry out a more accurate property risk assessment and risk rating based on the Munich Re NatCat hazard zoning system.

NATHAN Risk SuiteNATural Hazards Assessement Network

NATHAN RiskSuite

NATHAN World Mapof NaturalHazards

NATHAN Globe ofNatural Hazards(DVD)

NATHAN Single Risk

Online

NATHAN Portfolio

Risk

Online

NATHAN Portfolio

Risk

Pro

NATHAN Risk

Consulting

Munich Re’s Geo Services now grouped togetherin the NATHAN Risk Suite product family:

• NATHAN World Map of Natural Hazards. The wall map illustrates the natural hazards distribution.

• NATHAN Globe of Natural Hazards (DVD). The offline tool provides a comprehensive knowledge of the subject of natural hazards.

• NATHAN Single Risk and Portfolio Risk Online.The tool supplies essential NatCat expertise forunderwriting purposes online on connect.munichre.

• NATHAN Portfolio Risk Pro is the premium service for an efficient NatCat risk assessment and is connected directly into clients’ workflow (Web Service).

• NATHAN Risk Consulting supporting client or market events and tailor-made NatCat analysesfor many lines of business.

NATHAN Risk Suite products

Single and Portfolio Risk Online

NATHAN Risk Suite – Globe of Natural Hazards (2011)

DVD-DEMO

� Munich Re’s NATHAN Risk Suite based on geo-intelligence significantly improves

Clients’

� risk management (process risk, accumulation risk, “hidden” exposures)

� underwriting quality and portfolio profitability (all natural hazards anywhere in

the world can be assessed)

� and efficiency/costs (automation and standardization versus manual work)

� Geo knowledge and technologies are also available and very useful for risk

managers in the aquaculture community!

Key take-aways

THANK YOU VERY MUCH

FOR YOUR ATTENTION

Andreas Siebert

asiebert@munichre.com

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