Better data key to understanding exposures

Data should be seen as an asset that can help organizations more thoroughly understand their exposures, both now and in the future, according to Andreas Berger, Zurich-based CEO of Swiss Re Corporate Solutions, part of Reinsurer Swiss Re Ltd.

Due to legacy systems and siloed data accumulated through myriad mergers and acquisitions, however, “data and technology is probably one of the biggest problems we have in the insurance industry,” Mr. Berger said during a Monday session at Riskworld, the Risk & Insurance Management Society Inc.’s annual meeting in Atlanta.

Mr. Berger cited as an example thunderstorms, which, while not as intense and severe as hurricanes, nonetheless can wreak substantial damage. He noted that in this year’s first quarter in the U.S. alone, “we have already had $7 billion in losses” due to thunderstorms.

Such secondary perils represent a “blind spot” of exposures because they have not been extensively modeled, he said.

Tracking data such as population expansion can also lead to insights about exposures, Mr. Berger said.

For example, the population living in the landfall footprint of Hurricane Ian, the fall 2022 category 5 storm that struck the U.S., has increased 600% since 1970. Such value accumulation drives loss growth, Mr. Berger said.

Looking forward, Mr. Berger said climate change may bring with it new exposures that will require new data in order to understand and mitigate.

Heatwaves and drought could join thunderstorms and hail as perils that must be mitigated and therefore will require data collection and analyses.

“Climate change calls for forward planning,” Mr. Berger said.