Risk modelling in insurance
Equinix Inc, a global provider of interconnection and data center services, will partner with Lloyd's and the Lloyd's Market Association (LMA) to expand the insurance industry's pioneering catastrophe risk modeling platform. Called the Oasis Loss Modelling Framework, it is a pioneering open source solution.
"We are developing an open source service that has the innovative power to change the way the entire insurance industry works. As our business ecosystems continue to expand, it is inevitable that networks of co-active partners will form in others," said James Maudslay, Global Head of Insurance, Equinix.
Advanced analytics and modeling solutions can improve an insurer's performance and generate competitive advantage through more accurate predictive models that allow for more precise pricing definitions and fewer reserves. Furthermore, the use of high-performance data center services makes it possible to use new data sources initiated by the Internet of Things - for example, from telematics in the automotive sector, wearables in the healthcare sector, or smart homes/offices in property insurance.
Developed over the past five years at a cost of approximately $4 million, the Oasis Loss Modeling Framework is probably one of the most comprehensive innovations in catastrophe risk modeling in years. Hosted at Equinix and integrated into the extensive insurance ecosystem at IBX data centers, this platform provides insurers in the multi-billion dollar catastrophe insurance market with access to a very large number of global simulation model providers - from forecasts to charts of bushfires and other extreme weather events.
Open Source Solution
The latest version of this framework, just announced, will be fully open source, enabling better collaboration among insurers and service providers and allowing users to share data and information to optimize models. This optimized collaboration has been the focus from the beginning of the project. It is expected that the use of the Oasis framework will lead to significant modeling savings in the coming years.
The realization of the framework requires the participation of companies from the entire industry.
As a result, Equinix, Lloyd's and the LMA are working with ten enterprise representatives - many of them representatives of companies already with Equinix - to implement and test the system in Equinix's International Business Exchange™ (IBX®) LD5 data center. The project also involves Equinix partners Cinnober and Datapipe to provide hardware in the data center. The goal is to improve the modeling functionality for insurance companies and, as a result, to improve the quotes created for customers. Among other things, Applied Research Associates' HurLoss™ hurricane risk modeling will be used.
Insurance Management
The insurance industry is currently confronted with increased complexity, a growing number of regulations and higher consumer expectations. This increases the demands on IT systems, which must be able to adapt efficiently and cost-effectively. By placing their IT infrastructure in Equinix data centers, insurers gain access to leading colocation locations that ensure optimum security and availability.
In total, more than 8,000 companies already use the services in the IBX data centers to connect with partners, customers and employees worldwide.
Equinix's global interconnection platform facilitates data sharing among multiple members of the international insurance market. Market participants are able to connect directly to each other, increasing the performance of risk modeling systems and the security of cloud technologies.
