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Political violence insurers to benefit from Verisk’s first-of-kind predictive SRCC data model

7th September 2023 - Author: Kassandra Jimenez-Sanchez

Verisk has launched a new predictive strikes, riots, and civil commotion (SRCC) data model developed for political violence underwriters, exposure analysts, modellers, and specialty reinsurers as part of the Lloyd’s Lab accelerator programme.

Released by Verisk Maplecroft, the risk intelligence business of the data analytics provider, the SRCC Predictive Model provides forecasts for thousands of global locations on the potential for damaging civil unrest events to emerge.

It offers insurers an entirely new approach to how they assess and price these risks and is unlike anything currently available to the market, Verisk highlights.

Sam Haynes, Verisk Maplecroft’s Head of Risk Analytics, said: “Insured losses linked to major bouts of unrest have reached new highs in recent years, while our data tells us that in the last 12 months, SRCC risks have risen in over 50% of countries.

“As these risks expand, so too does the need for granular, forward-looking data that provides valuable insight into exposures.”

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Building on Verisk Maplecroft’s extensive experience in quantifying political violence, the model provides 12-month forecasts for 50,000 counties and districts globally on the risk of severe protests occurring that could result in insured losses.

The machine learning model validates its predictions against actual insured losses and draws on geospatial data covering the size of recent protests, concentrations of economic value, demographics, and a range of political risk, climate, and socio-economic indicators.

It will help political violence insurers to improve visibility on the frequency, location, and size of SRCC events; make better, more informed decisions to price policies; quickly identify portfolio exposure to unfolding SRCC events; and anticipate potential future SRCC related losses.

Unforeseen losses, alongside ongoing global political and economic uncertainty highlights the insurance industry’s need for enhanced solutions to help it anticipate where large-scale, damaging events may take place, analysts explain.

According to historical findings from the model, over the past two years, SRCC risks have generally worsened in all regions except in the Middle East and North Africa. However, Verisk notes that it is the forward-looking capabilities that should matter most to insurers.

The SRCC Predictive Model’s data suggests that the trend for costly, major civil unrest events across the world will likely continue, with political violence insurers potentially facing greater exposures.

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