Tooled and fuelled, by NATHAN
May 20, 2022
Soon, when Riskonet carries out a risk analysis for a client there will be more, a lot more, to that analysis than meets the eye. It will be tooled, for example, by a software solution developed by Munich Re, one of the world’s leading providers of reinsurance with over 140 years’ experience in risk management. And fuelled by vast amounts of hazard- and risk-related data collected over many decades.
What’s in a name? Well, quite a lot if that name is NATHAN, according to Sergey Obolensky, Executive Sales Director of Risk Management Partners division at Munich Re, which is one of the world’s leading providers of reinsurance, primary insurance and insurance-related risk solutions. Ron de Bruijn, Partner at Riskonet, thinks so too, because Riskonet is about to start using Munich Re’s Location Risk Intelligence Platform (LRI) to carry out risk analyses for its clients.
Scientific knowledge and risk modelling
Sergey kicks off by explaining that NATHAN is an acronym for Natural Hazards Assessment Network which forms the basis for LRI. It is a solution developed by Munich Re and based on global hazard data that has been systematically harvested and recorded by the company over the course of some 40 years. “It is underpinned by extensive scientific knowledge that we have accumulated, combined with risk modelling that was developed in-house,” he says. “The solution encompasses national and global risk evaluations, spatial or locational analyses and claims overviews. It will give Riskonet’s clients quick and accurate insights into their risk positions, be it at a single-asset level or of whole portfolios. This will enable them to take well-founded decisions regarding investments or risk management.”
Climate-change scenarios
The assessments of climate-change impacts are based on internationally agreed scenarios for greenhouse-gas emissions by the IPCC (Intergovernmental Panel on Climate Change). Soon to be available to Riskonet clients, LRI is based on the largest and most comprehensive set of expertise worldwide and comprises several modules and functionalities.
Portfolio distribution
One of these functionalities is “Portfolio Assessment”, which allows you to score a set of assets according to the risks they are exposed to. You can easily review the distribution of your portfolio across different hazard zones and filter by risk scores to identify red flags. Another functionality is “Areas and lines scoring”, which visualises the percentage of an area that is exposed to natural hazards. “In the real world, business data is not always ideally represented by an address or a coordinate,” reasons Sergey. “Consider, for example assets like railway lines, pipelines, roads, airports, industrial plants and ecological areas.”
“NATHAN will allow us to help our clients visualise their potential exposure to things like hailstorms, floods and earthquakes, and prevent that exposure turning into a risk.”
Ron de Bruijn, Managing Partner
Risk scores
NATHAN consists of comprehensive and high-quality data on natural hazards and risks that are available globally. Hazard zones describe the exposure of a particular location to a given hazard, while risk scores help to quantify assets' expected losses from direct physical damages.
Ahead of the game
As you might expect, thanks to over 140 years’ experience in risk management, the intuitive LRI solution and the huge amounts of harvested data, NATHAN’s level of accuracy is not to be sniffed at, continues Sergey. “Although this can, of course, depend on the type of hazard. For river flooding, for example, adequate risk assessment would need the relatively high-resolution of a separate risk score per 30 metres of geographic coverage. And to stay ahead of the game, the system’s underlying models are also constantly updated, which means we can reflect any changes in the frequency or intensity of potential hazards.”
User-friendly and powerful
There could hardly be a better recommendation for NATHAN than the fact that Munich Re has a vested interest in the system and relies on its underlying models for its own business. The geospatial LRI, for example, is a web-based application that boasts an easy-to-use interface with extensive analytics capabilities. It also includes an expert system with features for deeper and more detailed single-location and portfolio analyses. These are easy to learn, but powerful to use once you get further into the platform functionalities. Another advantage is the inclusion of a risk scores for current risks. Essentially, these scores provide additional information relating to a client’s exposure to a particular risk and they help to quantify the ensuing claim or damage.”
Visualise potential exposure
Ron de Bruijn is really looking forward to unleashing the power of NATHAN in risk analyses for Riskonet’s clients. “It will allow us to help them visualise their potential exposure to things like hailstorms, floods and earthquakes, and prevent that exposure turning into a risk.” They are not the only European reinsurer to offer such a solution but one of the reasons that Riskonet opted for Munich Re, insists Ron, is that their offering includes a climate-change module. “This will enable us to show our clients the hazards they are exposed to as a result of climate change, which is now playing an increasingly important role in the area of insurability,” he says. “In a nutshell, NATHAN will make Riskonet even better placed to help our clients identify and manage the risks they are exposed to, both today and tomorrow.”
