Dr. Eberhard Witthoff

Geoinformation and loss management

Munich Re’s CatLoss Estimation Service is a loss management tool that uses the technology of geocoding for the purpose of loss prognosis. It also supports primary insurers in the processes of claims handling and accumulation control.

The CatLoss Estimation Service provides ceding companies with an indication of how heavily their portfolios will be affected within 36 hours of a storm or any other severe weather event. To do so, it combines weather data and portfolio information, assuming that the portfolio is already available in geocoded form before the weather event occurs. Once the storm has moved on, the tool superimposes the wind field or hail field on a geocoded map and compares the portfolio and weather data.

As a rule, the need for information is greatest immediately after a natural hazard event, the most recent example being Winter Storm Kyrill. The CatLoss Estimation Service enables insurers to estimate their losses before the actual “wave” of claims arrives. Timely information can also improve cedants’ claims control.

Besides forecasting losses, the Adjuster Index Module incorporated in the CatLoss Estimation Service provides information on the local loss amount. Cedants can use postcodebased analyses to optimise the coordination of their loss adjusters and deploy them in the areas worst affected. These analyses are output in graphical and tabular form.

As the data include not only the location of the risk but also the sums insured, the cedants can see at once whether the loss involves large or small risks and can set priorities for claims handling accordingly. When calculating loss amounts, the CatLoss Estimation Service also considers the sums insured.

The service may also contribute to the identification of attempted fraud. Clear and concise maps make it easy for claims technicians to see whether a reported loss is inside or outside the actual storm area. They can then quickly decide whether an invoice can be paid without further ado or whether it has to be examined by a loss adjuster.

Another positive spin-off of the examination is a detailed portfolio analysis. in that the CatLoss Estimation Service reveals discrepancies in portfolio management and thus makes a further contribution towards quality control. The system can, for example, identify risks with incorrect street names or postcodes or with sums insured that exceed a certain limit.