Lockton Re selects Verisk agricultural risk models in the United States to develop new (re)insurance solutions

BOSTON, Nov. 20, 2024 (GLOBE NEWSWIRE) — Lockton Re, a leading global reinsurance broker, announced a strategic collaboration with Verisk (Nasdaq: VRSK), a leading global provider of technology and data analysis, to bring new (re)insurance products to the market. Lockton Re will use VeriskIt is agricultural risk modeling solutions – including Verisk’s Multiple Peril Crop Insurance (MPCI) and Crop Hail Model for the United States – to understand the impact of climate change and weather factors on agricultural production and potential insured losses.

With significant changes in premium rates and commodity prices, it is not sufficient for reinsurers and insurers to simply rely on historical losses to assess current risk. Verisk’s models provide comprehensive, scientific, stochastic insights into the risks facing the U.S. agriculture industry today, helping clients seeking to maximize profitability and address actuarial pricing challenges in the marketplace.

Verisk’s models, including the US hail model, are unique in that they simulate hailstorms based on 10,000-year stochastic event catalogs. Lockton Re will use Verisk’s models to obtain the most realistic view of loss scenarios, taking into account crop genetics, yields, prices, exposure, weather data, political conditions and harvesting practices. management.

“We are embarking on a journey to advance risk management options for the U.S. crop (re)insurance industry,” said Kris Lynn, principal broker and agricultural practice leader at Lockton Re. “By integrating advanced climate data and understanding the global impact of El Niño – Southern Oscillation (ENSO) on agricultural production, we are able to offer reinsurers a data-driven approach to risk transfer and innovation of products that did not exist before. Adoption of the data and analytics needed to track the evolving risk landscape has been slow. We aim to change that. »

“Lockton Re brings a new and disruptive perspective to the U.S. crop market, and we are excited to support its innovative approach,” said Oscar Vergara, business development manager for agricultural modeling solutions for Extreme Event Solutions at Verisk. models, Lockton Re will be able to provide more informed, data-driven solutions that account for everything from hail damage to the effects of extreme weather events fueled by climate change. Reinsurers and insurers need a robust and up-to-date risk assessment model to help them maximize profits within the risk tolerance level.

Move forward indexed
solutions to agricultural risks

Verisk’s crop models will support Lockton Re’s development of new index products that will be designed to help (re)insurers address the growing risks of climate change on agricultural production. Verisk’s models provide the (re)insurance industry with a reliable solution for understanding individual crop policy risks. Using tools like Verisk’s Fund Designation Service helps portfolio risk managers use the results to analyze the marginal impact on their profitability of adding new states where underwriting history may be limited and optimize designation alternatives.

The US crop insurance market has seen significant growth in recent years, with indexed insurance products, such as those developed by Lockton Re, gaining market share. According to the National Crop Insurance Services (NCIS), parametric products accounted for up to 12.4% of the MPCI premium in 2023 in the United States, with even higher shares in key states.

Lynn concludes: “As climate change continues to impact agricultural yields globally, the collaboration between Lockton Re and Verisk will provide insurers and reinsurers with the tools and information they need to navigate a increasingly volatile landscape. This collaboration marks a new chapter in crop insurance, driven by data, analytics and a commitment to improving risk transfer solutions.

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About Lockton Re:
Lockton Re is a leading global reinsurance broker, providing comprehensive risk transfer solutions and expert advisory services. With a focus on innovation and disruption, Lockton Re helps insurers and reinsurers manage risk in an evolving market.

About Verisk
Verisk (Nasdaq: VRSK) is a leading strategic data analytics and technology partner to the global insurance industry. It enables clients to drive operational efficiencies, improve underwriting and claims outcomes, combat fraud and make informed decisions on global risks including climate change, extreme events, sustainability and political issues. Through advanced data analytics, software, scientific research and deep industry knowledge, Verisk helps build global resilience for individuals, communities and businesses. With teams spread across more than 20 countries, Verisk regularly obtains certification by Great place to work and promotes a inclusive culture where all team members feel at home. To find out more, visit Verisk.com and the Verisk Press Room.