global solutions consulting group global solutions consulting - Willis

The enquiries we hear from our clients include:
— Which hazards is our business exposed to on a global scale?
— What are the potential Property Damage & Business Interruption
(PD/BI) losses we may face on a regional and/or single site basis?
— How do these compare with our current retention levels, insurance
limits and our general company risk tolerance?
— Can more than one facility be a� ected by the same natural hazard event?
— How exposed are our suppliers?
— What risk mitigation options can we consider to reduce our exposure?
To assist in answering these questions, Willis GSCG o� ers the following
services to help identify, evaluate and manage our client’s risks:
Strategic
CAT Review
CAT Modelling
CAT Risk
Engineering
• ASSISTS IN SHAPING
A COMPANY STRATEGY
FOR MANAGING CAT
RISK EXPOSURES
• QUANTIFICATION OF
PORTFOLIO PD/BI LOSSES
• REVIEW OF CURRENT
INSURANCE LIMITS FOR
CAT PERILS
• QUANTIFICATION OF SINGLE
SITE PD/BI LOSSES
• IDENTIFICATION
OF VULNERABILITIES
• RISK IMPROVEMENTS
TO HELP REDUCE FUTURE
LOSSES AND IMPROVE
BUSINESS CONTINUITY
Marc Lehmann
Managing Director
Willis GSCG Catastrophe Risk Management
Tel:+44 (0)20 3124 6697
Email: lehmannm@willis.com
Torolf Hamm
Senior Catastrophe Risk Consultant
Willis SRS Catastrophe Risk Management
Tel:+44 (0)20 3124 8281
Email: hammt@willis.com
Junsang Choi
Senior Catastrophe Risk Consultant
Willis GSCG Catastrophe Risk Management
Tel:+44 (0)20 3124 6352
Email: choiju@willis.com
Sohia Vanderpump
Catastrophe Risk Consultant
Willis GSCG Catastrophe Risk Management
Tel:+44 (0)20 3124 8455
Email: vanderpumps@willis.com
Ben Dryne
Senior Catastrophe Risk Consultant
Willis Business Risk Solutions, Australia
Tel +613 8681 9802
Email: dryneb@willis.com
Willis Limited
The Willis Building
51 Lime Street
London, EC3M 7DQ
United Kingdom
Tel: +44 (0)20 3124 6000
www.willis.com
© Copyright 2012 Willis Limited.
Willis Limited, Registered number: 181116 England and Wales.
Registered address: 51 Lime Street, London, EC3M 7DQ.
A Lloyd’s Broker. Authorised and regulated by the Financial Services Authority.
9496/03/12
GLOBAL SOLUTIONS
CONSULTING GROUP
NATURAL
CATASTROPHE
RISK CONSULTING
GLOBAL SOLUTIONS
CONSULTING GROUP
Recent events around the globe have highlighted
the impact natural hazards can have across wide
geographic regions and the importance for clients
to better understand their risks and exposures.
It has become evident over the past 50 years
that insured and economic losses due to natural
hazards are trending upwards and it is unlikely
this will reverse.
Although natural hazards are considered
rare, when we look at the statistics - most
corporations have a 30% chance of experiencing
an earthquake, fl ood or wind related natural
disaster in the next 20 years. These low
frequency high impact events cause signifi cant
property damage and business interruption to
global business operations and ultimately impact
on the company’s profi ts and employees, as well
as damaging reputation and market share.
As part of one of the world’s leading risk
management and insurance intermediaries, Willis
Global Solutions Consulting Group (GSCG) can
offer a wide range of catastrophe risk consulting
services to help companies better identify and
quantify their natural hazard risks and assist them
in making more informed decisions to support
their risk transfer and mitigation requirements.

GLOBAL SOLUTIONS
CONSULTING GROUP
STRATEGIC CAT REVIEW
A Strategic CAT Review begins with an Exposure Review to identify where a Client’s assets are
situated geographically in terms of value and number of locations. For key regions the exposures
are mapped to identify clusters (locations in close proximity) that could be a� ected by the same
natural hazard events.
A Natural Hazard Ranking Analysis is then undertaken to provide a fi rst diagnosis of a client’s
peril exposure based on a qualitative and comparative ranking system. This assessment coupled
with the Exposure Review can assist companies in shaping their risk management strategy for
dealing with natural catastrophe issues, so that more informed decisions can be made around
future strategic planning, risk management and acquisition activities. Historic records for
portfolios located in natural hazard prone regions are also provided to support the analysis.
Below are sample outputs from a Strategic CAT Review.
Figure 1.1: Exposure Review
Figure 1.2: Cluster Analysis
Figure 1.3: Natural Hazard Ranking Analysis
Figure 1.4: Historic Events
KEY BENEFITS FROM A STRATEGIC CAT REVIEW
— Promotes awareness of the natural catastrophe hazards to which a company is exposed to on
a global basis and the potential impacts.
— Assists companies in shaping their risk management strategy for dealing with natural catastrophes.
— Enables senior executives to make more informed decisions around their business continuity
planning needs, particularly in natural catastrophe prone regions.
Although natural hazards are considered
rare, when we look at the statistics -
most corporations have a 30% chance of
experiencing an earthquake, fl ood or wind
related natural disaster in the next 20 years.
CAT MODELLING
Willis GSCG has extensive experience in the use of natural catastrophe models to help clients
quantify their portfolio loss expectancies for varying return periods and perils including
earthquake, windstorm and fl ood. Analyses can be undertaken for both probabilistic and scenario
(single event) losses.
CAT modelling draws together the fi elds of seismology, earthquake engineering, hydrology,
meteorology, atmospheric science, mathematics, statistics, actuarial science and insurance. It is
a highly complex and a sophisticated process and Willis GSCG provides our clients access to this
niche and extremely important of area of risk management. A CAT modelling analysis provides
estimates of probable maximum losses for Property Damage and Business Interruption based on
a wide range of possible natural hazard events. Typical outputs include an Exceedance Probability
(EP) curve, as illustrated below.
Figure 2.1: Example evaluation of a simple insurance programme for earthquake, including
the identifi cation of activation and exhaustion levels. This information is used to review
the suitability and competitiveness of the client’s current insurance programme in relation
to natural hazards.
Figure 2.2: Illustrates how the use of additional data and risk mitigation measures can
reduce the modelled loss estimates and potentially allow for premium savings.
KEY BENEFITS FROM A CAT MODELLING ANALYSIS
— Quantifi cation of portfolio loss expectancies for varying return periods and perils including
earthquake, windstorm and fl ood.
— Analyses can capture both probabilistic (multiple events) and scenario based (single event)
loss assessments.
— Clients are able to objectively and scientifi cally review the suitability and competitiveness of
their current insurance programme in relation to natural catastrophe perils.
— Identifi cation of locations contributing the most to the expected losses, so clients can focus their
attention on these high risk facilities as part of their natural catastrophe strategy.
CAT RISK ENGINEERING
For companies with large, individual facilities that are vulnerable to high levels of localised
Property Damage and Business Interruption exposure, Willis GSCG can assist by undertaking
detailed natural hazard risk assessments to help identify and quantify the natural hazard risks
at a given facility. This analysis includes the following steps:
1. Detailed quantifi cation of the local hazards for the site.
2. A site visit by our natural hazard risk engineers to inspect the main physical assets
and operations.
— Identifi cation of actual on-site vulnerabilities of the major buildings, process equipment,
stock and on-site utility infrastructure deemed critical for continued operations.
— Literature review and comparison against similar assets that have su� ered damage from
past events.
3. Quantifi cation of the site’s Probable Maximum Loss (PML).
Provision of loss estimates for Property Damage and Business Interruption to assist in risk
transfer decisions and insurance programme structuring.
4. Provision of practical risk improvement measures.
Recommending, where appropriate, cost-e� ective improvement measures to help mitigate
property, operational and life safety risks at the plant.
KEY BENEFITS FROM CAT RISK ENGINEERING
— Detailed PML assessment for a key facility to reduce uncertainty around the modelled losses
by taking into account actual site specifi c vulnerabilities.
— Identifi cation of Risk Improvements (recommendations) to help reduce losses or anticipated
downtime from a natural hazard event.
— Recommendations can also help to improve general Business Continuity and Life Safety
at the plant.