BOSTON--()--Catastrophe risk modeling firm AIR Worldwide (AIR) announced that Aspen Reinsurance (“Aspen Re”) has licensed AIR’s Multiple Peril Crop Insurance Model (MPCI) for China to enhance its risk management capabilities in catastrophe-exposed agricultural regions of China.
“Companies assuming risk in China are increasingly turning to AIR to help manage their catastrophe risk. Our relationship with Aspen Re reflects our continued focus on and growth in this evolving insurance market.”
“The structure of the agriculture insurance market in China continues to evolve and improve. Given the complexities of provincial and local government protection in this region, we need a reliable and independent tool to help manage the risk,” said Massimo Amico, senior underwriter, agriculture reinsurance, Aspen Re. “AIR’s crop model provides insight into the severity, frequency, and location of potential future droughts, floods, and typhoons in China, giving us an objective and reliable assessment of the potential impact on crop losses.”
Weather is the predominant driver of agricultural losses in China. In the AIR Multiple Peril Crop Insurance Model for China, a weather-based approach to crop modeling ensures greater accuracy in modeled loss calculations. The high resolution model explicitly accounts for the spatial correlation of weather events, whether they are widespread or highly localized. The model thereby enables an assessment of crop risk at both provincial and county levels, catering to the wide variety of insurance needs, such as accurately determining the remaining risk to reinsurers after complex rules relating to geography-specific government recoveries are considered.
“The AIR Multiple Peril Crop Insurance Model for China leverages industry-leading crop loss modeling experience; in-depth knowledge of China’s geography, farming practices, and insurance system; and a thorough grasp of the frequency and severity of potential adverse weather events and resulting crop losses,” said Uday Virkud, P.E., executive vice president at AIR Worldwide. “Companies assuming risk in China are increasingly turning to AIR to help manage their catastrophe risk. Our relationship with Aspen Re reflects our continued focus on and growth in this evolving insurance market.”
Alan Calder, group head of catastrophe risk management at Aspen Re, added, “The new AIR Multiple Peril Crop Insurance Model for China will be a central part of our China agricultural portfolio risk assessment process. We believe there are many business benefits from this model, and it will be an additional tool to help us manage and price agricultural risk in China.”
AIR released the industry’s first Multiple Peril Crop Insurance Model for China in 2011. It provides a fully probabilistic approach for determining the likelihood of losses to the country’s major crops of corn, cotton, rapeseed, rice, soybeans, and wheat. The model employs AIR’s advanced Agricultural Weather Index™ to capture the significant effects that weather-related perils have on each crop during different growth stages. It explicitly models damages resulting from various weather perils, including drought, floods, and typhoons, which are the leading causes of crop loss in China. The model accommodates China’s complex policy conditions, which vary depending on crop type, peril, and province.
About Aspen Re
Aspen Re is a business segment of Aspen Insurance Holdings Limited (“Aspen”) with gross written premiums of US$1.2 billion in 2011. Aspen Re offers a broad range of specialty reinsurance products and has a global footprint with offices in the US, Bermuda, the UK, Switzerland, France, Germany and Singapore.
About Aspen Insurance Holdings Limited
Aspen provides reinsurance and insurance coverage to clients in various domestic and global markets through wholly-owned subsidiaries and offices in Bermuda, France, Germany, Ireland, Singapore, Switzerland, the United Kingdom and the United States. For the year ended December 31, 2011, Aspen reported $9.5 billion in total assets, $4.5 billion in gross reserves, $3.2 billion in shareholders’ equity and $2.2 billion in gross written premiums. Its operating subsidiaries have been assigned a rating of “A” (“Strong”) by Standard & Poor’s (“S&P”), an “A” (“Excellent”) by A.M. Best and an “A2” (“Good”) by Moody’s Investors Service (“Moody’s”). For more information, please visit www.aspen.co.
About AIR Worldwide
AIR Worldwide (AIR) is the scientific leader and most respected provider of risk modeling software and consulting services. AIR founded the catastrophe modeling industry in 1987 and today models the risk from natural catastrophes and terrorism in more than 90 countries. More than 400 insurance, reinsurance, financial, corporate, and government clients rely on AIR software and services for catastrophe risk management, insurance-linked securities, detailed site-specific wind and seismic engineering analyses, and agricultural risk management. AIR is a member of the Verisk Insurance Solutions group at Verisk Analytics (Nasdaq:VRSK) and is headquartered in Boston with additional offices in North America, Europe, and Asia. For more information, please visit www.air-worldwide.com.