Athenium Analytics and Aon collaborate to enhance SCS modeling for insurance
Athenium Analytics announced that it is collaborating with Aon to build enhanced modeling capabilities for severe convective storms (SCS) to better inform insurers as they tackle the growing losses associated with this peril. Athenium Analytics is collaborating with Aon to fill SCS data gaps that insurers need to accurately price, underwrite portfolios and purchase reinsurance as a means to rethink access to capital when navigating volatility from this peril.
Through this collaboration, the companies will provide:
- An updated catalog of historical event footprints for US SCS, including its sub-perils of hail, straight-line winds and tornadoes. This will be available within Aon’s Impact Forecasting Severe Convective Storm catastrophe model to analyze specific scenarios, such as a repeat of April 2011’s Super Outbreak in the US, and present opportunities for improved underwriting and aggregation tools.
- A new hypothetical (stochastic) event set for Impact Forecasting’s updated SCS model to consider plausible events that have not recently occurred.
“Insurers recognize that SCS is a challenging peril to understand as historical data that has traditionally been relied upon tends to be biased towards population centers, hence underrepresenting the hazard in rural or growing communities. In addition, fraudulent claims can lead to an inflation of losses, making it difficult to quantify vulnerability. With these challenges, current tools often underestimate the true cost of the SCS peril. Our collaboration with Athenium Analytics will enable insurers to make more informed business decisions when managing this risk.” – Senior Managing Director for Aon’s Reinsurance Solutions business, Liz Henderson.
“The collaboration between our teams will build upon synergies across hazard, technology and data to boost insurers’ understanding of severe convective storms. The better the historical data, the more robust the stochastic event set will be to create realistic average annual loss and probability curves to support underwriting and reinsurance buying.” – Global Head of Research & Development for Aon’s Impact Forecasting team, Siamak Daneshvaran.
The program will leverage Athenium Analytics’ expertise in both natural and data sciences. “Our team of meteorologists, data scientists and engineers are equipped to create solutions allowing carriers to more accuracy and comprehensively evaluate SCS risk. The innovative data aggregation and normalization techniques we utilize across a range of various SCS datasets and sources will generate more actionable hazard insights, which are key for insurers to better navigate and adapt to future SCS risk.” – President at Athenium Analytics, Jordan Foley.
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By leveraging CoverWallet, the insurtech startup Aon acquired in January 2020, Aon is further expanding the solutions and services it provides to 30 million small and medium-sized US businesses. New and existing clients now benefit from a dedicated team for small and middle market businesses, a user-friendly digital platform, and self-service tools.