Any organization with a large number of properties needs to be able to understand its exposure to the potential impact of catastrophic events around the world. Insurance companies, dealing with tens or hundreds of thousands of risks, have a particular interest in being able to analyze their portfolio quickly and in detail. Recent developments in the online modeling of catastrophic risks have excited underwriters around the world.

The reason for their excitement is that until recently, this form of modeling was a disconnected process. The vast amounts of information involved were often gathered and delivered in hard copy, were difficult to bring together and could only be analyzed offline by experts. Additional challenges included trying to update the information frequently, and the fact that getting an answer to a single question took days—neither of which were optimal scenarios for making rapid decisions.

Now, with tools like Aon Re Global's CatPortal, clients have direct access to information about their risk portfolios, which they can slice and dice online with complete freedom, completing an analysis in minutes that used to take weeks. Even more powerful, the information can be combined with mapping information and satellite images to make it much easier to understand.

Clarifying Insurance Options by visualizing Critical Database information

The first big breakthrough is the ability to go from a 30,000-foot view of the portfolio down to an individual risk, tracking the source of risk down to the most granular level. This allows clients to model the effect of a new risk on the overall portfolio in seconds, helping them to make more informed risk management and pricing decisions backed by hard information.

The second breakthrough is that clients can literally go from a 30,000-foot view of the world down to ground level—interactively. So having identified a subset of their portfolio, they can, for instance, throw a 25-kilometer ring around a particular feature, such as a nuclear power station, an airport or a chemical plant, to see what risks it might be exposed to during an incident. Or they can look at the course of a particular tropical storm or hurricane from the past, and understand what their risk would be if it were to happen today. Clients can even access maps showing the number of five-story buildings built on particular soil types in areas of high landslip risk and then see whether any of them are built of reinforced concrete.

"Some of CatPortal's visualization tools would be familiar to anyone who has used online resources like Google Maps," says Deepak Badoni of Aon Re Services. "That simplicity is one of its strengths, when coupled with the detailed information and the powerful analytical tools it provides. It's the combination of the two that brings real power. Without the statistical rigor of the database tools, the maps would be just a gimmick, and without the mapping tools, the information in the database would have much less impact."

End-Users have quickly grown to rely on Catportal

Clients who have been using the new tool are impressed, especially by the speed of the application. "It does in seconds what used to take us hours or even days," said one satisfied user. The same client has found richer ways to analyze its information. "We have found at least a dozen uses, and we are still just scratching the surface," they said. Perhaps most important, colleagues throughout the organization are using the same consistent, up-to-date data in reaching their business decisions.

"The bottom line," says Guru Rao, who heads up the Catastrophe Systems Group of Aon Re Services, "is that insurers are now able to make more informed decisions more quickly, both at the portfolio level and when it comes to evaluating individual risks. That's good for them, good for the industry and good for their clients."