ARA Case Study

Making it easier for clients to evaluate, onboard, and use ARA's catastrophe models

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With Nasdaq's robust, secure and cost-effective catastrophe modelling service, ARA make it easier and more affordable for market participants to evaluate, onboard and use their models.

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Business Challenge

ARA’s US hurricane model, HurLoss, provides unparalleled insight into the potential impacts of hurricanes. The wind hazard model in HurLoss is the basis for design wind loads in all hurricane-prone regions of the US. Its physics-based approach to assessing wind vulnerability accurately models the combined effects of known and unknown building attributes. However, despite their unique capabilities and reputation for excellence, it has been a challenge for ARA, as a specialist in US hurricane hazards, to gain traction in the global insurance industry. This has primarily been due to the barriers which prevent re/insurers from adopting alternative catastrophe models, such as the traditional requirement to host separate platforms for separate models.

Solution

ARA needed a solution which made it easier and more affordable for re/insurers to evaluate, onboard and use their models. Nasdaq delivers that solution through its robust, secure and cost-effective catastrophe risk modelling platform.

Re/insurers can now easily access ARA’s model through a single standardized user-interface and financial model without any hardware or software installation. This helps to remove the barriers that used to prevent insurers from readily adopting new models and provides re/insurers with access to a wider range of models.

By taking advantage of Nasdaq’s fully hosted and managed service, ARA have been able to save valuable time, allowing them to focus on effective model delivery and strategic priorities, such as core hazard and vulnerability modelling development.

ARA have always been strong supporters of the Oasis Loss Modelling Framework and were involved in the initial Oasis Solutions Project with Lloyd’s of London in 2015. Through its modern front-end and hosted service, Nasdaq has brought Oasis into a production-ready environment. HurLoss was one of the first two models deployed on the platform in January 2017.

While ARA retains its own platform with a basic set of financial modelling options, ARA identified that the Nasdaq Risk Modelling service offered a way to improve market access to new models, including the ability for firms to trial ARA’s model prior to purchase.

Value Delivered

Extended market reach

Before working with Lloyd’s, Oasis and Nasdaq, HurLoss had not been licenced in the London market. By offering HurLoss via Nasdaq's Risk Modelling service, ARA have expanded the availability of the model and removed many of the barriers that may have prevented potential clients from accessing the model. Nasdaq has addressed these barriers by delivering an easy-to-use and affordable interface to Oasis, which is fully managed and hosted.

Focus on core strategic priorities

The ability to licence HurLoss on Nasdaq Risk Modelling for Catastrophes has allowed ARA to focus more on model improvements. In the past year, they have added a “cat response” capability for near real-time modelling of landfalling hurricanes and the ability to model “leakage” of uninsured storm surge losses into wind-only coverages. They have also expanded their vulnerability models to include a broad range of industrial facilities.

Optimized resources

ARA works closely with the Nasdaq and Oasis teams to ensure that HurLoss meets client’s needs. The Nasdaq team takes care of the onboarding, privileges, secure data transfer, system updates and model deployment updates. Nasdaq also provides a parallel environment where ARA can test updates before they are deployed to production ensuring quality is maintained. Close collaboration ensures activities are coordinated efficiently and any issues that arise are addressed quickly.

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