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CASE STUDY: ARA

ARA extends global market presence for US hurricane risk modelling with Simplitium’s ModEx

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With ModEx’s robust, secure and cost-effective catastrophe modelling platform, ARA make it easier and more affordable for market participants to evaluate, onboard and use their models.

BUSINESS CHALLENGE

ARA’s US hurricane model, HurLoss, provides unparalleled insight into the potential impacts of hurricanes. The wind hazard model in HurLoss is the basis for design wind loads in all hurricane-prone regions of the US. Its physics-based approach to assessing wind vulnerability accurately models the combined effects of known and unknown building attributes. However, despite their unique capabilities and reputation for excellence, it has been a challenge for ARA, as a specialist in US hurricane hazards, to gain traction in the global insurance industry. This has primarily been due to the barriers which prevent (re)insurers from adopting alternative catastrophe models, such as the traditional requirement to host separate platforms for separate models.

ARA’s collaboration with Simplitium provides the market with access to a high quality, transparent, and independent model for the world’s most important region-peril combinations via a robust, secure and cost-effective platform.

Frank Lavelle, Principal Engineer / Vice President, ARA

SOLUTION

ARA needed a solution which made it easier and more affordable for (re)insurers to evaluate, onboard and use their models. ModEx delivers that solution through its robust, secure and cost-effective catastrophe modelling platform.

By integrating their HurLoss model on ModEx, (re)insurers can now easily access ARA’s model through a single standardised user-interface and financial model without any hardware or software installation. This helps to remove the barriers that used to prevent insurers from readily adopting new models and provides (re)insurers with access to a wider range of models.

By taking advantage of ModEx’s fully hosted and managed service, ARA have been able to save valuable time, allowing them to focus on effective model delivery and strategic priorities, such as core hazard and vulnerability modelling development.

ARA have always been strong supporters of the Oasis Loss Modelling Framework and were involved in the initial Oasis Solutions Project with Lloyd’s of London in 2015. Through its modern front-end and hosted service, ModEx has brought Oasis into a production-ready environment. HurLoss was one of the first two models deployed on ModEx in January 2017.

While ARA retains its own platform with a basic set of financial modelling options, ARA identified that the ModEx environment offered a way to improve market access to new models, including the ability for firms to trial ARA’s model prior to purchase.

ModEx provides an easy-to-use and affordable interface, allowing end-users to consider and view a broader range of cat models.

Frank Lavelle, Principal Engineer / Vice President, ARA

VALUE DELIVERED

  • Extended market reach
    Before working with Lloyd’s, Oasis and Simplitium, HurLoss had not been licenced in the London market. By offering HurLoss via ModEx, ARA have expanded the availability of the model and removed many of the barriers that may have prevented potential clients from accessing the model. ModEx has addressed these barriers by delivering an easy-to-use and affordable interface to Oasis, which is fully managed and hosted.
  • Focus on core strategic priorities
    The ability to licence HurLoss on ModEx has allowed ARA to focus more on model improvements. In the past year, they have added a “cat response” capability for near real-time modelling of landfalling hurricanes and the ability to model “leakage” of uninsured storm surge losses into wind-only coverages. They have also expanded their vulnerability models to include a broad range of industrial facilities.
  • Optimised resources
    ARA works closely with the Simplitium and Oasis teams to ensure that HurLoss meets client’s needs. The Simplitium team takes care of the onboarding, privileges, secure data transfer, system updates and model deployment updates. Simplitium also provides a parallel environment where ARA can test updates before they are deployed to production ensuring quality is maintained. Close collaboration ensures activities are coordinated efficiently and any issues that arise are addressed quickly.
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ABOUT

ARA

ARA provides comprehensive risk assessment services and tools for government and private industry. ARA’s state-of-the-art US hurricane risk modelling software, HurLoss, provides risk management decision assistance for the (re)insurance industry and other market participants such as property owners and brokers.

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MODEX

ModEx is the only independent multi-vendor cat modelling platform, brought to market by Simplitium and powered by the Oasis LMF. ModEx delivers a hosted and fully managed cat modelling service that offers a new and cost-effective way for firms to meet their modelling requirements. 

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SIMPLITIUM

Simplitium is a global financial services technology provider, delivering specialist solutions to some of the world's largest investment firms and (re)insurance companies. Simplitium’s solutions help firms optimise operations, ensure transparency and manage ever-increasing volumes of data. 

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