CRG has developed an independent CAT Risk Maturity Assessment. The assessment covers all aspects of CAT management, from your use of CAT models to how well your CAT capability is integrated with your core underwriting functions. Through this framework we can assess your CAT risk management capability, help you identify gaps and opportunities and work with you to build an action plan to enhance your skills and realise more business value from your investment in CAT.
The Cat Maturity Assessment will consist of a number of elements described below
Cat Maturity Assessment – health check!
A detailed measurement of your Cat management capability, based upon our maturity model (Cat Risk Integrated Management). Activities will include stakeholder mapping, stakeholder interviews, Cat models, systems and resources as well as data quality assessment. The main deliverable is a dashboard, benchmark and executive report of Client Cat management capability identifying opportunities and threats (SWOT and “CRC-Card”).
Please ask a copy of our Cat-Card (standard)
Cat Management Blueprint
A blueprint for an improved Cat management capability for Client Group, based upon the findings of the Assessment. The blueprint being designed to resolve any identified shortcomings and capture any identified opportunities in the catastrophe risk management (Service, Model & Components, Infrastructure & Application, DQ, Methodology and Team cultural values).
Cat Management Road map
How the organization will actually realize the improved Cat management capability through an organized program of investment and change. This will include clear identification of and early realization of ‘quick wins’.
This initial assignment will develop an integrated set of deliverable to document your current Cat management maturity, to design an improved capability at an executive summary level and to identify the necessary steps to realize those improvements across the business as well as recommending an appropriate sequencing for that realization, aligned with the stated priorities of your business.
A workshop to confirm the scope of the assignment, identify the key stakeholders, identify existing sources of knowledge, agree how the program should be managed, delivered and communicated to Group Management and wider underwriting/business community.
Summary analysis of the prevailing state at Client: existing Cat management processes policies and procedures; current catastrophe peril/region models, software and data; adequacy of current resources; Cat reporting, underwriting support and group business integration
An integrated articulation, at executive summary level of an improved Cat management capability as required by the business to execute its existing business plans.
A clear articulation of the program of change required to deliver the improved capability and corresponding positive business outcomes. This will incorporate a suggested sequencing aligned to stated underwriting and business needs and plans for change.
A cost-benefit analysis of the realization of the improved capability will include the identification of both ‘quick’ and ‘major’ wins highlighting key bottom-line outcomes that can be delivered through certain elements of the program.
An executive presentation of the findings and recommendations of the study, highlighting clear business alignment and providing high-level insight into the key elements
CRC have a pragmatic approach based initially around the skills of individual Cat Risk Consultants to help deliver the maturity assessment, backed up by the scalability and services needed to subsequently execute on the Blueprint and Road map thereby delivering real business outcomes.
For initial assignment we propose a small, experienced team of CRC people, working in partnership with the in-house business and CAT, IT and “Risk & Compliance” teams under the direction of CGC -Principal Consultant and Client Group Management or CRO.
We recommend program duration of a minimum of 10 (+/- 2) elapsed weeks
Identifying typical challenges:
- Catastrophe Modelling Analyst often learns of degradation or outages in CATRisk Services from the end-user community. As such they find themselves “reacting” to requests to resolve these incidents. The limited view of the end-to-end CATRisk Service often leads to incorrect prioritization of issues (pricing, accumulation control, and risk mitigation or transfer to retro-cession, coming through the CAT Team).
- Inability to perform accurate root cause analysis around and within the models, causing a delay in the resolution of catastrophe pricing, accumulation control, risk transfer or risk management and problems as resolution teams are assigned unrelated events to diagnose.
- A “common language” relating to CATRisk Services, Systems and Components within the typical Re/insurer does not currently exist. As such an inconsistent naming convention relating to CAT information has evolved. Maintaining the accuracy of information within CAT is key to achieve goals.
- Limited ability to accurately assess the impact of new or change in regional (Americas, AP, EMEA) portfolio assessments of the “underwriting and risk” community. It was noted that the relationships between CAT Models and components and Services are not readily available.
- Limited ability to roll back a change once it has been implemented. Inability to accurately monitor the change after it is applied due to disparate configuration information relating to CAT Models and components.
- Re/insurers desire to reduce the amount of research required to understand the impact relationships between CAT Models, Systems and Components.
The following gaps were discovered (in reinsurance assignments) which inhibit the achievement of CATRisk Global methodology goals:
- Service Impact Modelling tools to enable service managers and CAT Analysts staff to visualize and quickly understand the root cause and impact of CAT component availability on business services, end-users, and on important business metrics associated with a service.
- Basic automated notification ensuring that CAT staff with the right skill set is proactively and interactively notified of potential or pending problems at the right time
- Service levels are not actively monitored from an end user perspective.
- CATRisk Global believes Re/Insurers currently do not undertake monitoring relating to end user experience of Catastrophe Risk related services
- Once Reinsurers deploys the solutions and a cat service model is built with end user response time monitoring, CATRisk Global anticipate that Availability and CAT Service Management maturity levels will become well above the industry average. This is in conjunction with maturity growth in other underwriting and business as well as IT disciplines.
- Our proposed solution will allow Reinsurers Command Center to actively monitor performance degradation from an end-users perspective through synthetic internal transactions. This ability will allow a “proactive” notification of possible business impacting events. The proposed CATRisk Global solution/s will become a valuable “Independent source of the truth” as information should automatically be populated within the models and underwriting environment and via the process of reconciliation; duplicate or out-of-date information is removed. Accurate information is provided relating to the relationships between CAT Risk Global allowing for better risk assessment (modelling, control, transfer, planning).
- Reinsurers cat analysts will understand the relationships between components and how they support the underwriter or senior management experience to identify and resolve problems immediately. The proposed solution will allow Reinsurers to view real-time impact of CAT Models technologies on the level of service delivered for business services, and keep end users informed of the compliance of each business process. Reinsurers will improve Service Levels through blending information existing within tools available to the Reinsurers Service Desk in order to assess the business impact of a CAT service disruption. The proposed solution/s enables Reinsurers to proactively detect potential delays and errors in the underwriting or business process (from data analysis to active portfolio management). It will also avoid interruption of catastrophe business services at any time, but more specifically at‘peak or renewal’ times and will assist in post event evaluations.
The solutions and benefits from Catastrophe Risk Integrated Management are outlined below:
- CAT Risk Service Management L1: Understanding end user response times increases the return on investment in catastrophe modelling applications by aligning performance and value added with business objectives and reducing operational costs
- CAT Process Management L2: This will provide assessment on Real-time business-aware information about CAT services and IT infrastructure. Business-aware service models enable IT to pinpoint “root cause” and prioritize Business-critical problems. CATRisk Global reporting and Web portal technologies deliver CAT-based dashboards and CAT impact reports.
- CAT Model and Components L3: This provides a description of existing CAT models and provides an accurate and consistent baseline view of the IT infrastructure, detects changes, and enables active management of desired IT configurations to run models for high frequency large/small ‘Direct & Fac’ accounts or‘Reinsurance’ portfolios across single/multiple regions for single/multiple perils or natural hazards and/or terrorism models.
- CAT Infrastructure and Application Management L4: IT assures the successful, on-time completion of critical batch cat model processes (including cat modelling services packs, new and existing model changes or overnight loading or accounts). By understanding the business relevance of your batch processes, you can ensure that errors in their execution will be prioritized and resolved according to their business impact so your critical catastrophe business services, across divisions, remain available.
- CAT Risk Data Quality Management L5: Understanding Input catastrophe data (property/risk features, geo positioning, policy conditions and wordings, secondary perils; storm surge or Tsunami and fire following shocks) minimum desired accuracy to better/optimal use of catastrophe models for underwriting pricing, cat accumulation control, risk transfer and/or active portfolio management through Dynamic Financial Analysis (DFA).
- CAT Methodology L6: This assessment provides a rigorous and strictly “independent evaluations” on the validity of a specific cat model (vendor x peril x region) loss frequency and severity distributional assumptions (to accurately represent the Industry/client claims activity and Real/predictive Loss portfolio/s history), sensitivity of parameters choice, model for CAT dependencies; of events, of multiple perils (i.e. hurricane and Earthquake, or across different administrative EQ boundaries, faults and systems rapture know no boundaries), for specific business units and regions. We evaluate the scientific challenges facing catastrophe models to accurately represent scholastically geophysical and planetary extreme scenarios with the support of our growing network of global scientists.
- CAT Team Cultural Values L7: We perform evaluations to test for the principal motivating factors behind the internal CAT community members from the ‘reactive’ or ‘just belonging’ mind-set through ‘change’ to the ‘service’ or ‘make a difference’ motivation present in all human interactions.