Manage Emerging Risk in the Insurance Industry

High-Probability High-Impact Risks

High-probability, high-consequence events, are the new situation that insurers face, when Earthquake Preparedness Alert issues in public. Earthquake Preparedness Alert is a key component in understanding how customers feel, act, and react when probability of an earthquake is highly increased in a specified region and time window. Earling Earthquake Preparedness Alert is the perfect example of using massive amounts of data to gain actionable insights to manage risks and change them to value and it is a new factor in insurance competitor analysis.

Partners or Competitors? New Territories

Since we began issuing Earthquake Preparedness Alerts to our partners in the insurance industry, soon we recognized that most of the insurers are desired to transfer their risks to other (re)insurance companies, competitors and partners. It is a widespread risk, but on the other hand it is an opportunity for those parties in the insurance industry who receive Earthquake Preparedness Alerts. As an insurance competitive advantage, it means only the (re)insurances, who receive Earthquake Preparedness Alerts can manage such underwriting and pricing emerging risks, that impact almost all of the insurance products; but parametric policies are at risk most.

insurance industry emerging risks and markets; solutions

Fig.1 - Earthquake Preparedness Alerts helps insurers to auto reject or auto approve new customers even during the high-risk severe ground conditions time window.

Insurances Emerging Risks: Emerging Markets

Emerging Risks

There are new risks and opportunities in Earthquake Preparedness Alerts, which involve the insurance industry decision makers with 4 different market segments including residents, industries and businesses, insurance companies and governments. Each of these segments need to transfer their risk in the first priority to the international insurance companies, and in the second priority to the local companies. Even it can be used as a progressive insurance competitive advantage or aggressive competition strategy by competitors. Here the Earling's exclusive service, which developed for the insurance industry, assists decision-makers to manage risks that can be more than $100 billion annually to turn it to a big market in 40 countries. During the high-risk time window short term business liability insurance contracts are one of the blackholes that can affect risk takers in the insurance industry.

Emerging Markets

The best market we propose to an insurer to accept its earthquake risk while probability of an event is increase is oil and gas industry. Oil and gas industry is one of the low-risk, rapid, affordable and interesting markets for the insurance industry. Oil and gas emerging markets for the insurance industry article explains why we choose oil and gas industry from 15 main sectors as one of the best candidates for insurances as an attractive market to accept their risk when high-risk seismic activities detected.

Risk Management Action Plan in Insurance Company

Once an Earthquake Preparedness Alert issued, local insurances encounter various high-risk customers in the worst time when the chance of a major event notably raised. Decision-makers in the insurance industry need to prepare required technical tools and agreements to manage or transfer the related risks for the specified regions in the Earling alerts, in a way that costs of the risk transformation drastically decreased.

Insurance Industry Earthquake Risk Management Action Plan

Resident Behaviors in Earthquakes and Emerging Risks

Even in the regions with a very low insurance penetration rate, issuing an Earthquake Preparedness Alert, cause notable changes in the behaviors.

Based on the latest studies, more than 20% of the residents who received Earthquake Preparedness Alerts, moved to online brokers/ insurtech websites to make a price comparison. Consequently, It means Earthquake Preparedness Alerts potentially can increase the insurance penetration rate both in life and non-life market.

Business Reaction Risks and Opportunities

All business companies are somehow vulnerable to earthquakes. In many cases, the economic costs of minor or major earthquakes are much more than the cost of destruction and can be up to 15 times more in which can affect the all-risk policies. Various provided solutions/ products by the insurance companies, alongside Earthquake Preparedness Alerts, make the insurance industry vulnerable in case that risks transferred to the insurers through interruption, liability, life, property, and all risks.

Undercover Earthquake Risk Management

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Fig 1. Earling undercover territories

How we can help?

In general, Earling has a global seismic monitoring network and specialists that are subject matter experts. Regarding the mentioned challenges, Earling can deliver support.

  • In the pressure on profitability, performance management and key performance indicator settings.
  • In the entrance of parametric insurance markets and issuing alternative products, Earling can deliver independent advice by our global resources.
  • To keep control on the impact of catastrophic events, Earling can assist in optimizing, validating on Cat and reinsurance programs modelling.
  • Assist in facing InsurTech, when they noticed about a high-risk time-window.

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