September 2014 36 Bermuda:Re/insurance+ILS


The future of technology and AIR Worldwide


AIR Worldwide’s chief operating officer, Bill Churney spoke to Bermuda:Re about current and ongoing developments in the delivery of catastrophe modelling and risk analytics.


What trends in the industry are driving the evolution of catastrophe modelling?


The risk management landscape has become more complex in recent years. The industry is increasing its use of advanced analytics and, as part of that, is relying more on modelling to inform business decisions. This focus on analytics is even more pronounced given today’s competitive environment and challenging market conditions.


To differentiate themselves and the risks they underwrite, companies want models that are more detailed and more sophisticated, as well as new models that cover more global risks. We’re also seeing stricter regulatory regimes that require companies to demonstrate a deep understanding of their risk and the many sources of uncertainty.


AIR’s Touchstone was developed to offer improved


performance so that companies can run analyses faster—and run more analyses—to obtain a more comprehensive understanding of the drivers of risk, to test the sensitivity of the models, or to satisfy regulatory reporting requirements.


What’s the role of technology?


The core value proposition of catastrophe modelling companies such as AIR is in developing scientifically sound, reliable models that produce results that can act as the trusted currency by which risk is managed and transferred. That said, technology is undoubtedly playing a pivotal role in how these models are delivered.


Over the past decade, technological advances such as high


performance computing (HPC) have made previously unattainable levels of performance and scalability a reality. Large, computationally complex analyses can now be scaled in parallel across hundreds of cores, dramatically reducing model run times. Performance will continue to accelerate as new technologies are implemented in future


EVERETT COLLECTION / SHUTTERSTOCK.COM


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