PCS rolls out catastrophe loss index for Mexico

Property/casualty insurance risk information provider PCS, a Verisk Analytics business, has launched its catastrophe loss index for Mexico.

PCS Mexico will provide full coverage for natural and man-made events across Mexico with total industry insured loss estimates of at least MX$300 million (approximately $15 million). Mexico is the fourth country to be covered by PCS, following the United States, Canada, and Turkey.

PCS Mexico will use the same loss estimation methodology that the company has had in place in the US, with the exception of threshold for event designation (MX$300 million) and for initiating the resurvey process (MX$1 billion, approximately $50 million).

The company has collaborated with the Asociación Mexicana de Instituciones de Seguros (AMIS) for the loss aggregation solution.

PCS and AMIS expect the launch of PCS Mexico to have an impact on the global reinsurance and insurance-linked securities market fairly quickly, as eight catastrophe bonds have included Mexico since 2006.

“Mexico is an important market, and there’s broad support throughout the global insurance and reinsurance community," said Tom Johansmeyer, head of PCS. "Unbiased tools are crucial to participating in a robust risk-transfer market, and we’re excited to be able to help our clients operate more effectively in managing risk and capital exposed to Mexico.”

Ted Gregory, director of operations, added: “The launch of PCS Mexico further solidifies PCS’s important role within the global insurance community. With Mexico susceptible to a multitude of significant perils, such as earthquakes, volcanic activity, and hurricanes on both coasts, PCS looks forward to serving our insurance community in Mexico and abroad with our collective efforts to provide exceptional service.”

Manuel Escobedo, AMIS president, said: “For many years, the insurance industry in Mexico has produced catastrophe loss estimates to inform our insureds, shareholders, and financial authorities. With this ISO/PCS agreement, our estimates will be timelier and more consistent.”

Recaredo Arias, AMIS CEO, said: “The ISO/PCS platform will allow Mexican insurance companies to access robust information to calibrate their catastrophe risk models. This will benefit both insurers and insureds, while paving the way for product innovation.”

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