Munich Re Licenses AIR's Updated Crop Insurance Models for the United States and China
(Thomson Reuters ONE) -
For immediate release:
Munich Re Licenses AIR's Updated Crop Insurance Models for the United States and
China
BOSTON, Aug. 7, 2013 - AIR Worldwide (AIR) today announced that it has updated
its Multiple Peril Crop Insurance (MPCI) Models for the United States and China.
These are weather-based models that estimate underwriting gains and losses based
on crop yield probabilities in the context of current conditions. Munich Re, a
leading global reinsurer, has licensed the updated models to enhance its risk
management capabilities for its catastrophe-exposed agricultural treaties.
"The risk associated with agricultural insurance portfolios is extremely
complex, which makes them challenging for insurance and reinsurance carriers
participating in the U.S. MPCI program," said Lambert Muhr, senior underwriter
for agricultural risks, Munich Re. "The ability to analyze the sensitivity of
agricultural portfolios to different yield and price volatility scenarios is
available in AIR's new model. That represents a major advantage given the recent
changes in overall premiums, premium rates, and other uncertainties affecting
this market."
The MPCI Model for the U.S. accounts for the latest Standard Reinsurance
Agreement (SRA) released by the U.S. government to estimate retained losses for
the crop insurer. With the Version 15 release of AIR's CATRADER(®) system, the
model was also enhanced to include multiple price volatility catalogs that allow
for more refined reinsurance analysis given increasing uncertainty in commodity
market prices. Another update is the ability for the model user to modify
industry premiums by adjusting default values as the U.S. government changes
premium rates of the key program crops. Finally, the historical event catalog
has been updated to incorporate all years from 1974 through 2011, and additional
reporting tools have been added for easy manipulation and visualization of model
results.
The MPCI Model for China has been updated to include the latest policy
conditions used in the market and an updated database of industry exposure.
"Weather is the predominant driver of agricultural losses in China, and AIR's
crop model properly accounts for weather events at a very high resolution," said
Karl Murr, head of agriculture, Munich Re. "The model provides a holistic view
of our risk and will be a central part of our China agricultural portfolio risk
assessment process."
AIR's MPCI Model for the United States was first released in 2007. Currently, it
is the leading independent pricing model for the crop reinsurance industry. Last
year, the majority of the traditional crop reinsurance transactions were
analyzed using the AIR U.S. MPCI Model. Crop insurance companies are using the
AIR U.S. MPCI Model results to assess policy risk and allocate policies to the
various risk-sharing funds available in the SRA program as part of their fund
designation process. The model is also being adopted by investors in the ILS
crop risk transfer markets.
AIR released the industry's first Multiple Peril Crop Insurance Model for China
in 2011. It provides a fully probabilistic approach for determining the
likelihood of losses to the country's major crops of corn, cotton, rapeseed,
rice, soybeans, and wheat. The model employs AIR's advanced Agricultural Weather
Index(TM) to capture the significant effects that weather-related perils have on
each crop during different growth stages. It explicitly models damage resulting
from various weather perils, including drought, floods, and typhoons, which are
the leading causes of crop loss in China. The model accommodates China's complex
policy conditions, which vary by crop type, peril, and province.
"The AIR crop models for the United States and China address significant
weaknesses found in traditional crop models," said Dr. Oscar Vergara, business
development manager at AIR Worldwide. "To provide the most accurate
probabilistic estimate of potential crop portfolio losses, they account for the
effects of weather, technology improvements over time, changes in policy types
and their market penetration, and changes in government protection agreements."
About Munich Re
Munich Re stands for exceptional solution-based expertise, consistent risk
management, financial stability and client proximity. This is how Munich Re
creates value for clients, shareholders and staff. In the financial year 2012,
the Group - which combines primary insurance and reinsurance under one roof -
achieved a profit of ?3.2bn on premium income of around ?52bn. It operates in
all lines of insurance, with around 45,000 employees throughout the world. With
premium income of around ?28bn from reinsurance alone, it is one of the world's
leading reinsurers. Especially when clients require solutions for complex risks,
Munich Re is a much sought-after risk carrier. Its primary insurance operations
are concentrated mainly in the ERGO Insurance Group, one of the major insurance
groups in Germany and Europe. ERGO is represented in over 30 countries worldwide
and offers a comprehensive range of insurances, provision products and services.
In 2012, ERGO posted premium income of ?19bn. In international healthcare
business, Munich Re pools its insurance and reinsurance operations, as well as
related services, under the Munich Health brand. Munich Re's global investments
amounting to ?214bn are managed by MEAG, which also makes its competence
available to private and institutional investors outside the Group.
About AIR Worldwide
AIR Worldwide (AIR) is the scientific leader and most respected provider of risk
modeling software and consulting services. AIR founded the catastrophe modeling
industry in 1987 and today models the risk from natural catastrophes and
terrorism in more than 90 countries. More than 400 insurance, reinsurance,
financial, corporate, and government clients rely on AIR software and services
for catastrophe risk management, insurance-linked securities, detailed site-
specific wind and seismic engineering analyses, and agricultural risk
management. AIR is a member of the Verisk Insurance Solutions group at Verisk
Analytics (Nasdaq:VRSK) and is headquartered in Boston with additional offices
in North America, Europe, and Asia. For more information, please visit www.air-
worldwide.com.
###
For more information, contact:
Kevin Long
AIR Worldwide
617-267-6645
klong(at)air-worldwide.com
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: AIR Worldwide via Thomson Reuters ONE
[HUG#1721531]
Unternehmensinformation / Kurzprofil:
Datum: 07.08.2013 - 12:17 Uhr
Sprache: Deutsch
News-ID 285566
Anzahl Zeichen: 7702
contact information:
Town:
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Kategorie:
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"Munich Re Licenses AIR's Updated Crop Insurance Models for the United States and China"
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