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AIR and RenaissanceRe Join Forces To Model Portfolio Risk

Data Analytics
April 11, 2018

Verisk has reported that catastrophe modeling firm AIR Worldwide (AIR) and RenaissanceRe will join forces to enhance long tail casualty risk modeling and further refine the first fully probabilistic model for extreme liability events.

Ian Branagan, senior vice president and group chief risk officer at RenaissanceRe said the company will "work with AIR to advance the industry's ability to better understand how to model and manage casualty and specialty risk."

AIR will produce portfolio-specific casualty losses based on its exposure management application, Arium. Arium's scenario-based loss assessment framework enables companies to systematically measure portfolio loss potential and exposures to simulated scenarios representing both emerging risks and forward-projected historical events.

"We're currently developing the industry's most comprehensive model of liability risk to help companies understand the complex interconnections in their portfolios, resulting in a comprehensive assessment of potential future losses," said Dr. Jay Guin, chief research officer, AIR Worldwide. "This model provides a forward-looking view of risk and will enable insurers and reinsurers to capture the full distribution of the frequency and severity of casualty catastrophes."

"Arium is a powerful exposure management application designed to help companies evaluate liability accumulations and run casualty risk scenarios," said Robin Wilkinson, vice president and managing director of casualty analytics at AIR Worldwide. "With Arium, insurers can analyze and quantify their exposure to simulated liability events and become more informed on what types of future events could cause significant losses to their portfolios. As Arium continues to evolve, the stochastic model will enable companies to understand and manage their casualty risk more thoroughly."

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