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PCS to expand industry loss estimates, index services to Japan

28th January 2019 - Author: Charlie Wood

Property Claims Services (PCS), a Verisk Analytics business, is expanding its industry loss data aggregation and index reporting capabilities to include non-marine catastrophe losses in Japan, according to reports from our sister site Artemis.

JapanThe product – which can be used as a trigger input for industry loss warranties (ILWs), cat bonds and other structures providing reinsurance or retrocessional protection – will be the company’s first to launch in Asia and is expected in the coming weeks.

Artemis says PCS is working on a streamlined approach that will result in a single industry loss estimate figure reported for all Japanese catastrophe and severe weather events costing the industry over $2 billion.

PCS is already tracking the 2018 cats that hit Japan, a number of which caused over $2 billion in industry losses individually and therefore would qualify for reporting under the new product.

PCS told Artemis it will make some historical data available under the new service and that estimates will be subject to quarterly updates.

Interestingly, PCS says this new product will not employ the same methodology it uses for events in the U.S and will Instead leverage an expert panel from the industry to provide loss estimate inputs.

PCS says this approach is a response to demand from existing clients who need a solution that can be used to help in hedging Japanese cat event exposures.

“Several clients approached us to launch an industry loss aggregation solution for Japan. They indicated a strong interest in a PCS solution as soon as possible,” explained Tom Johansmeyer, Co-Head PCS , to Artemis.

“We’ve reviewed the methodology and historicals with key market stakeholders to confirm that our approach meets their needs. While not exactly what PCS is doing in North America, our unique approach for Japan should help bring more original risk to market and, more importantly, help our clients continue to manage their risk and capital more effectively.”

Alex Mican, Senior Product Development Manager, PCS, added, “After the the catastrophe events of 2018, our clients reached out for a solution. It’s been an honor to collaborate with the leading market players to help develop an industry loss index that meets their specific needs.

“Development for Jebi and Trami is ongoing, and we’ll be working with the market to develop our next round of estimates in due course.”

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