|By Business Wire||
|October 21, 2013 10:45 AM EDT||
Verisk Climate and The Hartford Steam Boiler Inspection and Insurance Company (HSB) today introduced new technology and consulting services that help insurers and businesses predict the likelihood, severity, and financial exposure of U.S. electrical blackouts, which cause more than $100 billion in economic damages each year.
The Blackout Risk Model™ is offered through a consulting service provided by Verisk Climate and HSB. The technology can be used to assess the risk of electrical blackouts from hurricanes, winter storms, severe thunderstorms, peak power demands, human error, and other factors.
The technology incorporates data and analysis from HSB and Atmospheric and Environmental Research (AER), a unit of Verisk Climate, including a database of possible weather conditions, satellite analysis of trees near distribution lines, proprietary knowledge of the electrical grid infrastructure, and detailed economic data.
“Until now, it was not feasible for a retailer or manufacturer to conduct a quantitative cost-benefit analysis associated with backup power facilities and emergency response actions,” said Kyle Beatty, president of Verisk Climate, a division of Verisk Analytics (Nasdaq:VRSK). “By applying this technology, businesses can gain insight into the potential for their distributors or suppliers to lose power based on where they are located within the electrical grid network.”
The Blackout Risk Model™ will help insurers, businesses, and government emergency planners identify high-risk areas so they can better manage their risk and plan for a more effective response when power is disrupted by natural or man-made events.
“The new Blackout Risk Model™ provides technology and services that will help insurers calculate their accumulated risk and loss potential,” said Robin Luo, vice president of HSB, part of Munich Re. “We’ve been modeling electrical blackout risk internally for a decade. Now, insurers will benefit from the enhanced technology developed by our joint teams.”
The new modeling tool, which combines the technologies built independently over the past decade by HSB and AER, enables businesses to assess how electrical blackout risk varies by geographic region or grid area, the number of people and businesses likely to be without power in a particular blackout, and how long the outage might last for specific groups of customers. Blackout Risk Model™ is a trademark of HSB and Atmospheric and Environmental Research, Inc.
About Verisk Climate
Verisk Climate provides software, data, and analytics for enterprise climate risk management. The organization’s solutions help corporations improve resilience and profitability while enhancing service to their customers. Manufacturers, distributors, and retailers rely on Verisk Climate to accelerate revenue growth through more accurate forecasts of product demand and to promote stable operations by helping mitigate supply chain risk. Insurance carriers can apply Verisk Climate solutions to help improve customer service and reduce their property combined ratios through more accurate risk selection and lower claims expense. Verisk Climate draws on disaster risk models from AIR Worldwide, vertically integrated data from Verisk Analytics, and environmental data and expertise from its Atmospheric and Environmental Research (AER) unit. Verisk Climate is a division of Verisk Analytics (Nasdaq:VRSK). For more information, visit www.veriskclimate.com.
Hartford Steam Boiler (HSB), a member of Munich Re’s Risk Solutions family since 2009, is a leading engineering and technical risk insurer providing equipment breakdown insurance products, other specialty coverages, and related inspection services and engineering consulting. Founded in 1866, HSB's difference is grounded in extensive technical knowledge with over 50 percent of its staff engineers, inspectors and technical personnel around the globe. We leverage our knowledge to anticipate future risks and develop a range of specialized solutions that enable our clients to build deeper and more profitable customer relationships. HSB holds A.M. Best Company’s highest financial rating, A++ (Superior). www.hsb.com
About Munich Re
In the U.S., Munich Re provides access to a full range of property and casualty reinsurance and specialty insurance products through Munich Reinsurance America, Inc., American Modern Insurance Group and Hartford Steam Boiler Group. Munich Re stands for exceptional solution-based expertise, consistent risk management, financial stability and client proximity. This is how Munich Re creates value for clients, shareholders and staff. In the financial year 2012, the Group – which combines primary insurance and reinsurance under one roof – achieved a profit of €3.2bn on premium income of around €52bn. It operates in all lines of insurance, with around 45,000 employees throughout the world. With premium income of around €28bn from reinsurance alone, it is one of the world’s leading reinsurers. Especially when clients require solutions for complex risks, Munich Re is a much sought-after risk carrier. Its primary insurance operations are concentrated mainly in the ERGO Insurance Group, one of the major insurance groups in Germany and Europe. ERGO is represented in over 30 countries worldwide and offers a comprehensive range of insurances, provision products and services. In 2012, ERGO posted premium income of €19bn. In international healthcare business, Munich Re pools its insurance and reinsurance operations, as well as related services, under the Munich Health brand. Munich Re’s global investments amounting to €214bn are managed by MEAG, which also makes its competence available to private and institutional investors outside the Group.