ILS managers deepen analytics drive: RMS’ Shah

ILS managers are shifting focus towards more detailed data analysis as part of an increased investment drive in analytics, according to Jin Shah, client director at RMS.

In a video interview with The ReInsurer, Shah said over the past 12 months ILS managers had been increasing investments in analytics, particularly through hires for newly created analytics and technology roles. 

“ILS managers are historically known for making decisions based on aggregate loss data but as they look to derive more insights from the data they use they are looking at more detailed analyses,” he said. 

Shah said climate change remains a hot topic across ILS, insurance and other industries. 

“We have been helping our insurance companies with specific types of studies and assessments on climate change,” he said. 

“First and foremost, it is very important we keep our models up to date using the latest climate science available to us and the industry data that accompanies those models. 

“The next challenge is to form a view over a longer-term and this is where we have been helping our insurance customers think about ways in which they can improve their underwriting processes and think about risk selection in a different way, and position their portfolio for the longer-term.” 

He said these tools can also be helpful to the broader financial services industry as well as helping supply chain networks think about where their operations lie and which zones are at risk from climate change. 

RMS developed a Covid-19 projection tool early in the pandemic, which Shah said had been updated on a weekly basis across a number of scenarios. 

“Now the challenge is how do we use those projections for risk transfer from insurance companies to the capital markets who are looking to take on some of this life excess mortality risk as a swap for some of the risks they are facing in terms of longevity. 

“RMS is helping the risk transfer process, working with cedents, investors and brokers to help them understand the make-up of our model and give them the confidence they need to perform the risk transfer.”