Aon Benfield: Impact Forecasting

Impact Forecasting
Aon Benfield Analytics

In an increasingly risky world, (re)insurers need more sophisticated tools to quantify and manage the risks facing their businesses. Impact Forecasting develops models that help analyze the financial implications of catastrophic events so that our clients achieve a greater understanding of their risks. In turn, our clients are better able to quantify potential losses and develop more effective reinsurance programs.

As part of a global reinsurance broker, Impact Forecasting has an in-depth knowledge of our clients’ requirements within the industry. We focus on the development of models for specific perils and territories where the commercial modeling companies have not yet ventured or existing models are not fully meeting our clients’ requirements. In these cases, we can partner with clients using their loss data to pursue a modeled result more reflective of their experience.

Global Model Coverage
Impact Forecasting’s models focus on major insured risk areas as well as territories and perils where commercial modeling firms have not yet ventured, or existing models are not credible. Modeling projects have included:

  • Complete peril coverage of the United States, including models for earthquake, hurricane, tornado/hail/severe thunderstorm wind, storm surge and riverine flooding, wildfire, offshore oil platforms for the Gulf of Mexico and terrorism 
  • U.S. wildfire loss modeling, which emphasizes duration and distance reporting for optimal catastrophe cover purchases
  • A first of its kind Asian Typhoon Model which spans the Asian Continent and captures the potential loss across multiple territories, incorporating aspects such as wind damage, typhoon rainfall induced flooding and storm surge
  • The development of an extensive suite of models for Australia
  • Earthquake models for Japan, Australia and New Zealand 
  • Flood risk quantification in Central and Eastern Europe
  • Extensive development of European earthquake models
  • Support for various existing natural catastrophe insurance pools (e.g. New Zealand, Romania)
  • Customized loss modeling for unusual or difficult structures that commercial models cannot process or analyze
  • The validation of modeling results through client claims analysis and catastrophic event site visits by experienced Impact Forecasting engineers, seismologists and meteorologists

Catastrophe Analysis and Reporting
Throughout the year, Impact Forecasting provides real-time information on catastrophic events through Cat Alerts, Weekly and Monthly Cat Recaps and the Annual Global Climate and Catastrophe Report.

Proprietary Platform
ELEMENTS is our proprietary loss calculation software for catastrophe modeling. Understanding uncertainty is an essential part of catastrophe model development and therefore its quantification forms the core of the ELEMENTS application, defined by both hazard and damage/loss. Exposure data can be analyzed at both an aggregated and individual level using primary insurance policy conditions at coverage, location and policy levels – in addition to reinsurance conditions. The application’s robustness and flexibility also allows implementation of customized solutions.

About Impact forecasting
Impact Forecasting LLC is a catastrophe model development center of excellence within Aon Benfield whose seismologists, meteorologists, hydrologists, engineers, mathematicians, GIS experts, finance, risk management and insurance professionals analyze the financial implications of natural and man-made catastrophes around the world. Impact Forecasting’s experts develop software tools and models that help clients understand underlying risks from hurricanes, tornadoes, earthquakes, floods, wildfires and terrorist attacks on property, casualty and crop insurers and reinsurers. Impact Forecasting is the only catastrophe model development firm integrated into a reinsurance intermediary.