Russell Group promotes exposure analysis across aviation, marine, energy, casualty scenarios

Russell Group showcased its connected exposure analysis in a Monte Carlo briefing that encompassed loss event scenarios for aviation, marine, energy and casualty classes. 

In its “Connected risk comes of age” presentation, the data and analytics firm notes demand for solutions to “cross-sector, complex risks”.

The response is a resilience and sustainability drive that requires more proactive risk management and decision making, Russell Group said.

Lessons from the pandemic, trade-disruption, geopolitical tensions, war, climate change and macroeconomic instability are front of mind for corporate insureds and their risk transfer partners, the firm said.

“A major difference between Russell’s approach and current models out there, is that its solution is forward-looking,” said Russell Group’s managing director, Suki Basi.

“It seeks to analyse and understand an economic loss or connected loss for a (re)insurer or corporate before the event, not after.”

The firm prepared some specific scenarios, backed by data and analytics.

Geopolitical Tensions (Europe, North Sea)

Marine class – a geopolitical risk scenario post Russia / Ukraine which results in business interruption at Europe’s top three ports.

Europe’s three lagest trade parts are: Rotterdam ($611bn imports and exports annually); Bremerhaven ($397bn); and Antwerp ($374bn).

Combined total trade across the three ports is $1.38trn, with a highest one-day peak exposure of $4.23bn for the port of Rotterdam.

War (Asia, Taiwan)

Aviation – Taipei Taiwan Taoyuan International Airport for an estimated $7.2bn of ground accumulation insured exposure for 150 aircraft.

Climate Change (US Gulf of Mexico)

Offshore Energy – a storm track with characteristics similar to the great Galveston storm of 1867 would generate an economic loss of around $500bn.

Rising Costs (social inflation) globally

Casualty – prescribed casualty scenarios for forward looking economic exposure, calculated and applied to (re)insurer casualty portfolios to calculate casualty gross and net exposure.

“The benefit of this approach will mean that an organisation can pre-empt any potential hits to their business, helping them to become resilient in the long-term,” Basi added.