2. ยฉ Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Mission Statement
PCS is committed to serving our customers and
supporting the global insurance industry through the
identification and provision of reliable, accurate,
objective, and timely catastrophe loss estimates.
Core Values
Service
Integrity
Objectivity
Confidentiality
Transparency
Reliability
Consistency
Operating Principles
We will achieve our mission by:
๏ง Exceeding service and quality expectations
๏ง Facilitating an ease of doing business
๏ง Consistently producing a high quality product
๏ง Innovating within a culture of continuous improvement
๏ง Providing value in corporate citizenship
Who We Are
3. ยฉ Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
๏ง U.S. catastrophe claim information since 1950
๏ง PCS formed at request of insurance industry
๏ง Loss development surveys started in 1998
๏ง Estimates based on retrospective claims review
๏ง Continual improvement amid consistency w/past
Aggregating Actual Claims Data for 63 Years
PCS History
Serving the insurance industry
4. ยฉ Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
๏ง Primary insurance carriers
๏ง Marketing and Sales for agency bonuses
๏ง NOAA and governmental economists
๏ง Industry quarterly and annual reports
๏ง Catastrophe modelers
๏ง Reinsurers and reinsurance brokers
๏ง Capital markets
Providing a Service to Support the Insurance Mechanism
PCS Data Users
Broad benefit across industry and in various sectors
5. ยฉ Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
PCS Estimate
Benefits to Insurance Carriers
๏ง CAT claim frequency
๏ง Concentration of risk assessment
๏ง Loss ratio analysis
Underwriting
Actuary
๏ง Probable Maximum Loss analysis
๏ง Risk transfer ability
๏ง Internal quality controls
Risk Mgmt.
๏ง Reserve and pricing calibration
๏ง In-house model baselining
๏ง Strengthens regulatory approval
Claims
๏ง Cat code for reinsurance
๏ง Claims quality calibration
๏ง Adjuster resource allocation
6. ยฉ Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
3.06
6.52
3.55
10.65
7.75
8.95
24.4
14.39
9.95
11.8
12
20
13
25
18
22
19 19
18
23
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
PCS Cat Activity 2014
Winter storms and thunderstorms
2
0
1
4
A
v
e
r
a
g
e
Thunderstorms Drive 2014 Activity
``
๏ง 24 designated cats
๏ง $11.8B in insured loss
๏ง 5 winter storms, 1 EQ
๏ง 18 Thunderstorms
๏ง 24 designated cats
๏ง $16.6B in insured loss
๏ง More peril diversity
#
o
f
C
a
t
s
(In $B)
7. ยฉ Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Cat Bond Market Overview
1st half 2014
$5.6 billion, 18 transactions $4.7 billion, 14 transactions
PCS data used in 36% of worldwide transactions
North American
Issuance
Total
Issuance
Rest of World
North America
PCS
All other
$4.7B
$0.9B
$2.0B
$2.7B
8. ยฉ Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
First Half 2014 Issuance
Busiest in Market History
87%
$662M
$471M
$906M
$1.7B
$3.5B
$1.8B
$808M
$2.1B
$592M
$2.1B
$3.0B
$5.6B
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Historical First Half Issuance Activity
9. ยฉ Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Cat Bond 2014 Trends
Market diversity in geography and size
๏ง Five first time sponsors
๏ง $1.3B in fresh capital
๏ง Cat bond heavy with cat bond lite
๏ง Activity at the extremes
๏ง Continued Florida focus
๏ง Both small and large
Armor Re
Citrus ReGator Re
Sanders Re
๏ง Indemnity trigger use of PCS
๏ง PCS on about 1/3 of cat bonds
10. ยฉ Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Cat Planning and New Technology
Verisk Climate Respond and XACTWARE Property Insight
Benefits Benefits
๏ง Enables pro-active outreach
๏ง Helps refine reserve cone
๏ง Differentiates service
๏ง Allows thousands of granular views
๏ง Supports PCS Estimates
๏ง Improves Adjuster positioning
๏ง Facilitates improved planning
๏ง Decreases response time
๏ง Enables pro-active outreach
๏ง Continuing to add perils
Peril map
visuals
Aerial
technology
11. ยฉ Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Cat Planning and New Technology
Leveraging mapping technology from an IA perspective
๏ง Quickly Identify extent of probable damage
๏ง Matching claim size to skill level
๏ง Improves accuracy, customer service
๏ง Reduces cycle time
๏ง Overlays claims to damage
๏ง Matches before/after visuals
๏ง Improves ability to quickly assess
12. ยฉ Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Dimension rooms Diagram structures Drone diagramming
How Long Before Drones Diagram Houses?
Cat Planning and New Technology
Property claim technology awareness
Mobile Device
Thermal Imaging
13. ยฉ Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
PCS Innovation
App roll-out in September 2014
PCS Innovation Driven by Customer Feedback
PCS APP
๏ง Serves a need for field access
๏ง Ready for September release
๏ง Ready for US and PCS-Canada
๏ง Facilitates future innovation
๏ง Photo upload capability in 2015
14. ยฉ Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
๏ง Market demand for energy and marine index
๏ง Current inability to transfer risk effectively
๏ง Responding to customer requests for PCS to review
PCS Global Energy and Marine Decision in 1st Quarter 2015
PCS Global Energy and Marine
Pursuit of a new PCS index (fully separate from core PCS)
Market need
๏ง Hired in April consultant to develop methodology
๏ง Commenced two working groups in July
๏ง Broad industry representation on both work groups
๏ง Will share with market prior to commencing
Project status
15. ยฉ Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
๏ง Daily weather monitoring
๏ง Storm and event tracking reports
๏ง Tracking of claims and insured loss
๏ง Sharing of global cat planning and response best practices
๏ง Use for reinsurance and capital markets transactions
PCS in a local market
Using PCS to help with catastrophes
PCS Exists to Support the Global Insurance Industry
16. ยฉ Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Questions
&
Answers
Questions at any time: JLOUWAGIE@VERISK.COM
17. ยฉ Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Objectivity Integrity Service Transparency Reliability Consistency
18. ยฉ Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
Auto Cat planning
Protecting your value and service
250K
Flooded
vehicles
from
Sandy
๏ง One vs. multiple tows
๏ง Salvage yard with $0 storage
๏ง Agreed re-sale fees & proper titling
๏ง Maximizing re-sale value
๏ง Storage yard volume reduces cost
๏ง Agreements with car rental agencies
19. ยฉ Insurance Services Office, Inc. 2013, a Verisk Analytics company. Not for copying or distribution without permission.
PCS Cat Activity 2014
Distinguishing between one and two cats in early January
๏ง January 3-5
๏ง Heavy Snow
๏ง Over by January 5th
C
a
t
#
3
1
C
a
t
#
3
2
๏ง January 5-8
๏ง Continual freeze in MW
๏ง Temperature rise in East
Winter Storm drives 2014 First Quarter Activity