Aon’s cat modelling arm analyses 86% of riots
Aon Benfield’s catastrophe modelling arm Impact Forecasting has developed software to help users understand the financial impact of riots, by analysing 20 years of Indonesian unrest.
Impact Forecasting has used data from the United Nations and the World Bank that covers over 86% of all riots in Indonesia and documents the location, severity and catalyst for each event across the country.
The model includes:
- 600 unique events including the anti-Suharto rioting in 1998, ethnic rioting in Kalimantan and sectarian violence between Christians and Muslims in Maluku;
- location of central hotspots and the catalyst for each riot; and
- motives around elections, governance, popular justice, land, separatism and identity.
Aon Benfield Asia-Pacific chief executive Malcolm Steingold said: “The threat of rioting in Indonesia following the fall of the Suharto regime has had a significant impact on the property and life insurance markets in the country. Indeed, in the past 20 years rioting in Indonesia has led to more than 6,900 fatalities and damage to over 40,000 properties highlighting the destructive properties of riotous behaviour. By understanding this risk, it will help insurers to grow their business in Indonesia while being fully aware of the risks and hotspots for violence.”
Impact Forecasting terrorism, riot and political risk catastrophe model developer Mark Lynch said: “Riot modelling provides important information for insurers seeking to develop their capacity in emerging markets but are unsure of the stability of the country and, as a result, their insured assets. We have developed a map for each riot in Indonesia detailing the severity of potential property, life, and accident and health losses for each event. Modellers then overlay insurers’ exposures over each map to calculate the losses.”