Exercise II Dirk Hollnack. How can we assess the expected loss? Risk = Function Hazard Vulnerability Exposed values.

Exercise II

Dirk Hollnack

How can we assess the expected loss?

Risk = Risk = FunctionFunction

Hazard

Vulnerability

Exposed values

ExampleScenario Earthquake

Country X

Class of business: FireAccumulationcontrol report

EarthquakeStormFlood

(Name of treaty)

Sums insured in force at and for

Gross

Net retention

100% of treaty(30.6., 31.12.)

(Name of company)

Currency:

XYZ insurance company

X

30.06.2008 QuoteX

$ (000)

No.Accumulation assessment zones

123456789

10

Zone 1Zone 2Zone 3Zone 4Zone 5Zone 6Zone 7Zone 8Zone 9Zone 10

1-10 Total country

Liabilities (not reduced by deductibles)

Buildings

35,600132,72017,920

23,800 2,700

-- 5,260 4,16020,000 3,740

245,900

Contents

9,500 112,000 7,460

21,0001,740 110

16,4203,8805,0002,520

168,120

LoP

-- 7,960

960--

690--

2,000--

20,000--

31,610

Total

45,100 252,680 26,340 44,800 5,130

110 5,470 6,000

5,000

445,630

Residential CommercialIndustrial

Deductible: % of SI: No deductible

XXX

X

45,000

Examplary !

Workshop – Beispiel Kumulszenario

Liability Zones

Capital

4

2

1

10

7

9

8

6

5

3

Examplary !

Workshop – Beispiel Kumulszenario

Scenarios

Capital

4

2

1

10

7

9

8

6

5

3

I = VII = VIII = VIII

I = IX

Examplary !

Workshop – Beispiel Kumulszenario

Loss Ratios in % of Sum insured

Intensity Building Content LoP Total

VI 0.3 0.4 0.2 0.3

VII 2 2 1.5 1.9

VIII 7 5 10 7

IX 15 12 40 18

Examplary !

Workshop – Beispiel Kumulszenario

Exercise IIResults

Dirk Hollnack

Scenario North

Intensity Affected Areas Liabilities

VI 30 % - 70 % Zone 2 +

50% - 70 % Zone 4

98 000 – 208 000

VII 10 % - 20 % Zone 2 25 000 – 50 000

VIII 0 0

Examplary !

Workshop – Beispiel Kumulszenario

Scenario SouthIntensity Affected Areas Liabilities

VI (10%-20% Zone 9) + (10% Zone 8) +(10% Zone 7) +

(40% - 50% Zone 10)

8 100 -12 100

VII (10% Zone 8)+

(20% - 30% Zone 10) +

(40% - 20% Zone 9)

11 700 -19 600

VIII (30% - 40% Zone 9) +

(10% - 20% Zone 10)

14 000 - 19 000

IX (10% - 30 % Zone 9) 4 500 - 13 500

Examplary !

Workshop – Beispiel Kumulszenario

Losses Scenario North

Optimistic:

0.3% * 98 000 + 1.9% * 25 000 = 769

Conservative:

0.3% * 208 000 + 1.9% * 50 000 = 1574

Examplary !

Workshop – Beispiel Kumulszenario

Losses Scenario South

Optimistic:

0.3% * 12 100 + 1.9% * 19600 + 7% * 14 000

+18% * 4500 = 2 199

Conservative:

0.3% * 8 100 + 1.9% * 11 700 + 7% * 19 000

+ 18 % * 13 500 = 4 007

Examplary !

Workshop – Beispiel Kumulszenario