Perfect time for partnerships and collaboration: Hannover Re
Hannover Re, a top reinsurer in the world and a long-time Global Earthquake Model (GEM) sponsor believes now is the perfect time for partnerships and collaboration to adapt to the rapid technological changes and shifting risk management approaches in the reinsurance sector. These changes are fueled by high availability and affordability of technology; increasing vulnerability of poor population throughout the world; and more sophisticated risk-based regulatory frameworks.
Open source, open access initiatives
Model results are forming the basis for all types of risk transfers and Hannover Re sees that open source risk models will increasingly become the ‘currency’ for insuring, transferring and trading catastrophe business between an expanded base of stakeholders in the future.
“The Independent and objective way that GEM is developing the Global Earthquake Risk Model could potentially provide this ‘currency’ and significantly spark market interests,” Jörg Steffensen (L) – General Manager, Hannover Re Group Risk Management Modelling. He also foresees that GEM could be used as a blueprint for future projects to develop open global models for windstorm or flood.
GEM is the only not-for-profit-organization developing open-source, open-access seismic risk assessment tools and data – called OpenQuake. With open initiatives gaining momentum in worldwide natural catastrophe (or NatCat) risk assessment and management, GEM’s approach is well placed to become the global standard – committed to key principles for public good, openness and transparency, collaboration and credibility.
The GEM advantage
By sponsoring GEM, Hannover Re instantly contributes to higher global goals in making the world more resilient to earthquakes. GEM’s full model transparency on data, assumptions and parameterizations perfectly meets the demand of new initiatives, governments, private markets and customers of Hannover Re. With access to GEM’s in-house expertise and state-of-the-art earthquake data and hazard/risk models, Hannover Re was able to develop better information for insurance pricing – effectively reducing the ‘protection gap’.
In addition, benchmarking of existing vendor cat models against GEM at Hannover Re improved services for clients. To date, Hannover Re has developed aggregate earthquake risk models for Germany, Iran, Ecuador, Malaysia, Thailand and Singapore based on GEM OpenQuake.
“Our partnership with GEM expanded in-house expertise on earthquake risk and strengthened our overall internal and external risk management processes. We are committed to continuing this productive collaboration in the years to come.” Jörg Steffensen.