PERILS will provide market-wide property sums insured exposed to earthquake, tropical cyclone (typhoon) and flood

PERILS has established an industry exposure database (IED) for Indonesia, the Philippines and Thailand. For each of these territories, it now provides the market-wide property sums insured exposed to earthquake, tropical cyclone (typhoon) and flood.

Darryl Pidcock, head of PERILS Asia-Pacific, commented: “The Southeast Asian region continues to grow in terms of both natural catastrophe exposure and associated losses… This has the potential to enhance the availability of natural catastrophe risk capital… in Indonesia, the Philippines and Thailand as the availability and reliability of exposure and loss data increases.”

The sums insured information for each market is broken down by CRESTA zone, property line of business and the coverage types of building, contents and business interruption. In addition, insurance cover conditions such as the applicable deductibles and loss limits per peril are included in the database.

The IEDs for Indonesia, the Philippines and Thailand can be used for a range of applications. These include the calculation of market loss-frequency curves using probabilistic catastrophe models, the pricing of industry-loss-based risk transfer products, comparison of modelled market losses with actual market losses and benchmarking of portfolio-specific sums insured versus market sums insured.

To create the IEDs, PERILS adopted a different approach when sourcing the exposure data. Following consultations with the insurance sectors in Indonesia, the Philippines and Thailand, it was acknowledged that the process of making exposure and loss data available by primary insurers would take time.

Therefore, rather than securing this data directly from insurers, PERILS has collaborated with reinsurers, brokers and modelers, to establish a consensus on industry exposure levels in the three markets and has collected market sums insured information from these parties. 

Luzi Hitz, CEO of PERILS, explained: “During the process we observed that views of industry-level exposures can vary considerably from one source to another. By our novel approach of evaluating and testing these different market views to come up with a ‘Consensus IED’, we are convinced that we contribute to a better and more realistic assessment of industry exposures in Indonesia, the Philippines and Thailand.

”This information is fundamental to understanding catastrophe risk in any market, and it is particularly valuable in these highly catastrophe-exposed Southeast Asian markets.”