New CRESTA zones improve natural hazard risk management

Insurers and reinsurers in the property sector can now improve their risk management using refined CRESTA zoning which allows for a more detailed analysis of insurance data. Thanks to the existence of CRESTA zones, primary insurers and reinsurers can exchange aggregated underwriting information on a structured basis. Instead of the 43,000 zones that have been available up until now, in the revised standard there will be 250,000 high-resolution zones around the world.

Munich. CRESTA is an acronym for “Catastrophe Risk Evaluation and Standardising Target Accumulations”. CRESTA zones are used by insurers and reinsurers as a uniform basis for exchanging aggregated underwriting information on natural hazards. Munich Re and Swiss Re are sponsoring this expanded, more comprehensive web service and traditionally take turns managing the CRESTA secretariat, which will be run by Munich Re for a period of four years, beginning at the start of 2013.

To offer insurers even more utility, CRESTA zones will in future be based on official boundaries such as postal-code districts or administrative zones, rather than being defined according to the existence of hazards. The zones will be made available by GfK GeoMarketing. Using the some 250,000 zones (previously 43,000) around the world, it will be possible to prepare more detailed analyses. For all countries, there are two degrees of detail: “HighRes” for exchanging data and modelling natural hazards, and “LowRes” for monitoring accumulations and displaying diagrams. The CRESTA database now incorporates an additional 49 countries beyond the 86 previously available, making it the most comprehensive mapping tool freely accessible online.

Jürgen Schimetschek, Risk Manager at Munich Re and head of the CRESTA secretariat since January, said: “The new CRESTA zones make it possible to model risks even better and thus to enhance insurers’ risk management. Creating several times as many zones and incorporating more countries in the CRESTA database has made risks significantly more transparent and thus more precisely estimable.”