Risk Management

The PERILS Industry Exposure & Loss Database serves as an excellent source for validating probabilistic catastrophe risk models. Post-event risk model calibration, which is currently being carried out using a variety of sources with partly largely varying event loss estimates and industry exposure portfolios, may now be performed using the new PERILS benchmark data. In addition, by comparing the PERILS event loss data with the PERILS industry exposure, it becomes possible to derive damage degrees and to correlate them with observed wind speeds. This also enables the validation of the damageability function in catastrophe risk models.

The PERILS Industry Exposure & Loss Database also provides an excellent basis for assessing the risk of industry loss-based reinsurance or retrocession covers. Both the PERILS industry exposure and event loss data are based on exclusive reports provided by the identical sources. By analyzing the PERILS industry exposure portfolio with a probabilistic risk assessment model, the expected loss of industry loss-based covers can therefore be determined with an index-consistent exposure portfolio.

The PERILS industry exposure database can also be used to evaluate the correlation of multiple industry loss-based ILS/ILW commitments. As such, the PERILS industry exposure database can serve as a foundation for ILS/ILW portfolio optimization and accumulation control.