Risk is rarely one-dimensional. The convergence of different threats on a single carrier is becoming increasingly common. They compound, yielding greater potential insured losses. Catastrophe risk modeling analysis can not be limited to known factors, as they have in the past. One catastrophe can cause insured losses to spike, rendering carriers more exposed than they may have expected. Enterprise Risk Management (ERM) plays a specific role in mitigating the risks of such unexpected exposures. Part of implementing an ERM strategy effectively entails identifying all potential threats. One that has been overlooked—or difficult to identify and model, given a lack of applications and a paucity of data—can be found on the convention center floor.
Posts Tagged ‘convention’
Conventions are fertile ground for risk. With tens of thousands of people in one place, a single act of terror or a natural catastrophe could result in substantial insured losses for workers compensation carriers. But, it has been almost impossible to assign a number to this risk, let alone manage it effectively, since the data and modeling capabilities have not been available until recently. By triangulating among workers compensation, convention and venue databases, the measurement of convention clash risk is becoming a reality.
The continued rise of the convention industry has created a unique clash exposure for workers compensation (re)insurers. Carriers are increasingly familiarizing themselves with “known” accumulations, the risks associated with the day-to-day workplace, since the terror attacks of September 11, 2001. “Unknown” accumulations, on the other hand, have been more difficult to grasp. When employees across an insurance portfolio gather for conventions, additional catastrophic risk exposures begin to emerge.