July 5th, 2011

Guy Carpenter Releases the First Hail Model For the Slovenian Insurance Market

Posted at 1:00 AM ET

Guy Carpenter & Company announced that it has developed the first hail model for Slovenia, following the 2010 creation of a flood model for the country.

Since 2004, Slovenia has been affected by severe weather events that have included damage from hail. The weather events of 2008, which combined the destructive forces of wind, flooding and hail, resulted in total estimated insured losses of EUR200 million. Three of the five events that occurred in 2008 resulted in losses to catastrophe programmes, of which hail was an important component. In addition, two significant hail events occurred in May and June of 2009 that caused insured losses.

In this context, Guy Carpenter’s new Slovenia hail model will provide the industry’s first tool that allows insurers to quantify their exposure to the hail peril and to guide the structuring and pricing of reinsurance programmes.

Model Features

  • Hazard data for the model was provided by the Environmental Agency of the Republic of Slovenia and comprises 10 years of radar data, from which hail track ellipses were determined. The high frequency of hail events has enabled the full probabilistic modelling of the peril, despite the relatively short period of historic radar data. The model’s stochastic event set contains over 15,000 hail events.
  • The exposure module allows import of geocoded portfolio information, while a detailed built environment database also allows lower resolution portfolio information to be imported, by disaggregation of the data into a high-resolution modelling grid.
  • The vulnerability module contains damage curves for all major lines of business (motor, residential, commercial and industrial) that have been calibrated using over 90,000 hail claims from the region.
  • The newly updated financial module of Guy Carpenter’s model platform G-CAT® enables the application of all types of deductibles and limits on a per policy or per risk basis.

Nick Frankland, CEO of EMEA Operations, stated, “With the successful development of this valuable model, we now offer a full range of catastrophe modelling services to our clients in Slovenia. This is another example of the value and trusted strategic advice that Guy Carpenter delivers to our clients across the globe.”

Mark Weatherhead, Manager of GC AnalyticsSM Model Development Team, added, “Guy Carpenter is committed to providing the most accurate and transparent catastrophe modelling tools available for the key regions in which our clients operate. This new development provides detailed understanding for this increasingly significant peril and will allow our clients to make better informed risk management and reinsurance decisions.”

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