Aon Benfield has invested in a catastrophe model to help marine and energy insurers assess their cargo risks more accurately, in conjunction with model vendor RMS.
Catastrophe models are commonplace in the non-marine sector but the marine and energy insurance industry has often found it difficult to accurately manage exposures due to the non-static nature of the risks.
To date, existing models have offered no differentiation by commodity type, cargo volume or storage configuration.
RMS partnered with catastrophe model vendor RMS in a bid to overcome this and develop a modelling solution suitable for the marine and energy sectors.
The new product is available from Aon Benfield, which has broker exclusivity, to offer insurers the ability to refine coverage and purchase more efficient reinsurance at the forthcoming 1 January 2016 renewal.
The model comprises 85 cargo and specie vulnerability curves based on 18 commodity types - from pharmaceutical and petroleum to cars and fine art - and 12 storage options.
The curves will refine damage estimations for cargo from the perils of US hurricane including surge, US earthquake, European windstorm and Asia typhoon.
Highly detailed industry exposure databases for major global ports, which take into account cargo classification, volume and time in port, based on industry data and research, will also be included.
According to Aon Benfield, the model will enable marine and energy insurers and reinsurers to accurately assess cargo accumulations and loss potential from natural catastrophe events, and improve pricing assumptions for marine risks, leading to more competitive product offerings.
Paul Miller, international head of Aon Benfield's catastrophe management team, said the project would "drive industry standards for the modelling marine business and help to revolutionise the way insurers manage their exposures".
"Aon Benfield has made a financial investment in this innovative new solution because we believe it will genuinely add value to our clients' business and growth strategies," he added.
Aon Benfield's partnership with RMS also involves future development plans including offshore energy updates, a new marine data schema and a port interconnectivity model.
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