PERILS to expand coverage to New Zealand and Japan

PERILS, the independent Zurich-based organisation providing industry-wide catastrophe insurance data, has marked its 10th anniversary by highlighting its intention to expand globally.

It has set its sights on New Zealand and Japan, where typhoon Jebi has provided a strong example of the value of PERILS data as a trigger for risk transactions based on industry loss, according to PERILS chief executive officer Luzi Hitz.

In the absence of an official reporting agency in Japan, the industry loss warranty (ILW) market uses numbers from Swiss Re’s sigma report or Munich Re’s NatCatSERVICE as triggers—which is far from ideal.

“Swiss Re and Munich Re never intended these numbers to be used for triggers in ILW contracts but with the lack of other sources the market just adopted them,” Hitz said.

In contrast to these sources, PERILS regularly updates its data for every cat event it captures. Without such up-to-date data the market is stuck, said Hitz.

“The proper way of doing it would be to have an independent objective formal reporting agency such as us to do the work for the Japanese market,” he said. That is why PERILS is looking to extend its global coverage to Japan.

Expansion has been made possible by the enthusiasm with which the industry has embraced PERILS’ offering. Over the last decade, market support for PERILS has grown from approximately 40 percent to over two-thirds of the primary insurance industry in the PERILS-covered territories. In the same time period, PERILS exposure and loss data have facilitated a total of $17 billion of risk capital.

“That vision of providing greater data availability to support improved catastrophe understanding is as clear today as when we launched in 2009,” said Hitz.

“Without reliable exposure and loss data the potential margin for error in risk assessment is simply too great and that is why the work we do will remain relevant well into the future.

“There is no reason PERILS cannot expand to become a truly global data provider if the industry demand for the data we provide is there.”