Page 28 - Business Insights 2012-2013
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insurance modelling
‘for the MASSES’
T
hey look to the insurance market to hedge
against those risks, but setting a price
requires accurate information and good modelling
systems so that companies and insurers can
manage their exposures.
However, companies can find it hard to access the
data and models they need, so in three specific
areas, Imperial College Business School is working
with the private sector and other academic
institutions to deliver long-term solutions.
Two projects, both headed by
, are Knowledge
Transfer Partnerships (KTP), which give academics
unique opportunities to apply research to real world
business projects.
One aims to develop a generic framework to improve
the way that risks relating to large commercial
losses can be measured where there is inadequate
historical data.
“If you go back to basics, the question is how do you
create models if you don’t have the data,” says Biffis.
“The aim is to work with the syndicates in London and
reach out to the big reinsurers and primary insurers to
share data.”
This data will be merged on an anonymous
basis and the aggregate dataset used to develop and
test models. “This will produce a more
efficient understanding and sharing of risk
between businesses, households and insurance
companies,” says Biffis. “This is completely
missing at the moment.”
The project is funded by the Insurance Intellectual
Capital Initiative, a consortium of participants
including The Society of Lloyd’s, Hiscox plc, Liberty
Syndicates plc, Amlin plc and Aon Benfield plc and
will take three years to complete.
The second KTP project, a two-year collaboration with
Willis Group Holdings plc, aims to identify the factors
Businesses
constantly face
the threat of
a major event
such as a fire,
an explosion
or a serious
catastrophe
that could leave
them nursing
a very large
financial loss.
BUSINESS
INSIGHTS
2012 – 2013
28
