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Managing risk accumulations at Allianz

  • The information enables us to identify postcode areas in which we have an accumulation of insured risks in the form of individual premises.

    Catherine Dixon, Property & Risk Control Manager

Insurance is all about assessing risk. Providing the right information to underwriters to assess both the potential individual risk of any client (for example, trade, location, building type and so on) and their potential accumulation risk (for example, adding another commercial property in Cockermouth High Street to the books) is crucial to making the right underwriting decisions.

Allianz Commercial has recently used Cadcorp SIS to enhance their accumulation and perils management and reporting capability, particularly for the insurance of buildings and other commercial properties.

"Put simply, accumulation management involves knowing where individual premises for which we are providing insurance cover are located and how many other similar risks we insure in the same defined area," explains Catherine Dixon, Property & Risk Control Manager. "The information is based on Royal Mail® postcodes and therefore enables us to identify postcode areas in which we have an accumulation of insured risks in the form of individual premises, irrespective of who owns those premises."

This is then combined with other information, such as flood risk areas, contaminated land, areas at risk of terrorist attack and other types of risk. The information is obtained via government bodies, such as the Environment Agency, as well as other public and commercial organisations such as Ordnance Survey. The knowledge provided by this combination of accumulation and perils information enables Allianz to analyse not only where its insured risks are accumulating but also to instantly report on exposure in any given area on demand.

Cadcorp SIS is the key to this knowledge. An ‘accumulation and perils assessment’ system, which comprises a database of bespoke Allianz hazard ratings for a variety of perils and details of risk accumulations for all UK postcodes, has been created. In practice, the system enables Allianz underwriters to make decisions using up to-date information on risks, and is key to the calculation of premium and terms for any quotation. If the accumulation is too high in the area in question, the system will advise the underwriter accordingly.

Visualising hidden risks

A selection of managers can also review high value or referred risks on the Cadcorp SIS Desktop. Here they can review the map of the property in question, select a ‘buffer’ area around the property and then interrogate the database to find out which other risks fall within that buffer area. This overcomes the problems of postcode boundaries, which tend to follow a road centreline or river, and the fact that risks, such as flood plains, generally do not respect postcode area boundaries. For example, while a particular property may be in a postcode area with a low-risk rating, it may be on the edge of that area and adjacent to a postcode with a high-risk rating.

Benefits to the business

Before the new system was implemented, accumulation management reports were produced every six months. Today they are produced monthly, and when combined with individual risk assessment data, Allianz underwriters now have much better information at their fingertips to aid writing business. It also means that management has a more up-to-date and accurate picture of where the company’s insured risks are accumulating, enabling it to make timely and appropriate decisions in order to avoid excessive risk.

The products used

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