Equinix Partners with Lloyd's to Transform Catastrophe Risk Modeling
- Risk Management
- 30.11.2016 09:00 am
Equinix, Inc., the global interconnection and data center company, has collaborated with Lloyd's and the Lloyd's Market Association (LMA) to enhance a catastrophe risk modeling platform that could change the face of the insurance industry.
The Oasis Loss Modeling Framework is potentially one of the most radical shake-ups in the catastrophe modeling sector in years. Hosted in Equinix's interconnected insurance ecosystem, it gives insurers in the multi-billion dollar catastrophe insurance market access to a wider range of model providers from around the world.
The latest release of the framework, just announced, has now made it fully open source - encouraging greater collaboration and enabling users to share data and information to further improve their models.
Collaboration has been the focus of the project from the start. The creation of the framework required the involvement of players from across the industry, with Equinix, Lloyd's and the LMA gathering 10 managing agents together to implement and test the system within Equinix's London International Business ExchangeTM (IBX®) data center (LD5).
This unprecedented level of collaboration, also involving Equinix partners Cinnober and Datapipe, enables insurance companies to enhance their modeling capability - modeling anything from wild fires in Australia to hurricanes in the Americas - to ultimately improve the terms they can offer to their clients.
Equinix's global interconnection platform simplifies the sharing of data between multiple stakeholders in global insurance markets - from life to property and casualty. Market participants directly connect to one another, enhancing the performance of risk modeling systems and the secure consumption of cloud technologies, while lowering IT, bandwidth and network connectivity costs.
The Oasis framework was developed over five years at a cost of $4 million. It is expected to lead to significant savings in modeling in the coming years.
Highlights / Key Facts
- The launch of the LMA framework is coming at a time when catastrophic events such as Hurricane Matthew are happening with increasing regularly - with insurers often footing the bill.
- The Oasis Loss Modeling Framework was modeled using data shared by 10 managing agents - several of whom are existing customers of Equinix - who collaborated specially on this project. It also uses Applied Research Associates' HurLoss model. Additionally, Equinix brought in technology partners Cinnober and Datapipe who provided the hardware that runs the Oasis LMF at London data center, LD5.
- The insurance industry today faces increased complexity, more regulation and heightened consumer expectations. This is putting strain on IT systems, which must adapt in an efficient and cost-effective way. By moving IT infrastructure inside Equinix's global data centers, insurers gain access to leading colocation facilities, ensuring the highest levels of data center security and operational reliability.
- Advanced analytics and modeling can lift an insurer's performance, as competitive advantage can come from the more accurate pricing and loss reserving that predictive modeling can bring. Additionally, new data sources being driven by the Internet of Things(IOT) such as telematics in the motor industry, wearables in health and smart homes/offices in property are huge new areas of data input which Equinix simplifies.
- A combination of Equinix's global data center services and Performance HubTM solution, alongside Equinix Cloud ExchangeTM provide the secure, compliant and effective means of using an optimum mix of compute resource to meet the challenges that analytics pose to the insurance industry.
- Equinix accelerates business performance by connecting over 8,000 companies to their customers, employees and partners inside the world's most interconnected data centers.
Trevor Maynard, head of Exposure Management and Reinsurance, Lloyd's:
"The Oasis framework is groundbreaking in itself but really it's the nature of the collaboration that sets a new precedent. Equinix, Lloyd's and others have accelerated the creation of a market place for catastrophe models giving choice and the potential for deeper analysis to insurers."
Ken Curtis, LMA director, Finance & Risk:
"The LMA fully supports these initiatives which will help to lead the way in catastrophe modeling for the market and should ultimately lead to cost savings for members."
Dickie Whitaker, CEO, Oasis:
"Leaders in the catastrophe modeling field are realizing the value of the new, extensible, scalable Oasis Platform and deploying high quality models. This opportunity realizes a new range of cost effective transparent models coming to market."
James Maudslay, global head of Insurance, Equinix:
"Equinix's ability to interconnect businesses and partners has led to the launch of something that has the power to change how an entire industry works. As our business ecosystems continue to grow and more collaborations like this are formed across industry sectors, we will see more and more of this type of disruptive innovation - it's a very exciting time for Equinix and our customers."