Next generation liability risks

Online since 5.09.2017 • Filed under Risk Management & Consulting • From Issue 6 - September 2017 - February 2018 page(s) 79
Next generation liability risks

Allianz Global Corporate & Specialty SE (AGCS) is working with Praedicat to better predict the key catastrophe liability risks of the future.

By combining Praedicat’s forward-looking predictive modelling approach with AGCS’ underwriting processes and extensive liability risk portfolio analysis, the companies aim to identify the next generation of catastrophe liability risks for business customers far earlier than under current methods. Praedicat’s modelling engine uses machine learning technology to scan large volumes of data from peer-reviewed science publications and profile the likelihood that products or substances will generate litigation risks over their lifecycle. AGCS and Praedicat aim to combine the best of both approaches in this new risk assessment methodology.

Using forward-looking data models in addition to historic loss data analysis and risk engineering assessments, AGCS liability underwriters globally will be able to better identify and assess future liability risks for industries or single companies. Praedicat’s data analytics tools will help to evaluate the risk of a potential mass litigation, stemming from the use of a chemical, product, or substance in niche or widespread industry applications.

‘Forward-looking models will transform insurance underwriting. Through this collaboration we hope to change the core role of underwriters, freeing them up from the daily paper grind and empowering them to be data scientists,’ explains Hartmut Mai, chief underwriting officer and board member, AGCS. ‘Emerging risks are challenging to quantify for an insurer. But now, AGCS underwriters can identify emerging liability catastrophe risks with increased confidence based on in-depth data.’

Identifying litigation risks

When risk agents or named perils are identified, they are tracked over time as new data emerges and increasingly shapes scientific acceptance of the risk. Praedicat has further developed a database of industry and company exposures to the named perils. ‘With forward-looking models, machine learning, and algorithmic search, the insurance sector is in the midst of transformation,’ says Robert Reville, chief executive officer at Praedicat.

Research on emerging risks

There is a large degree of liability stemming from emerging risk, although just how much is not effectively measured today. Bringing together scientific and risk management expertise, both companies work closely to get in front of emerging risks that could have an impact on industry segments, such as nanotechnology in the food and beverage industry. ‘AGCS will help businesses understand potential emerging liability risks and their impact on their company while providing innovative solutions,’ adds Michael Hohmann, global head of liability, AGCS. ‘We will use the Praedicat data and tools to help our clients achieve better product stewardship and to tailor their insurance program to their specific risk profiles.’

Allianz Global Corporate & Specialty (AGCS) is the Allianz Group’s dedicated carrier for corporate and specialty insurance business. AGCS provides insurance and risk consultancy across the whole spectrum of specialty alternative risk transfer and corporate business. For more information, visit

Praedicat is a science-based data analytics company that offers a revolutionary new approach to emerging risk, working with (re)insurers and corporates to manage liability exposure and capture opportunity for better risk management and product stewardship. For more information, visit

Issue 6 - September 2017 - February 2018

Issue 6 - September 2017 - February 2018

This article was featured on page 79 of SABI Magazine Issue 6 - September 2017 - February 2018 .

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