In a significant statement of intent for non-proprietary models, Aon has implemented the Open Exposure Data (OED) Standard for the risk modelling of property reinsurance placements.
Led by Aon and reinsurers Hannover Re, RenaissanceRe, Scor and Swiss Re, the OED Standard, curated by Oasis, is a non-commercial venture.
According to the broker, the OED Standard is designed to test and support the hypothesis that open data standards in risk modelling are more effective than proprietary and commercial standards in terms of improving operational efficiency, reducing costs and increasing transparency and consumer choice.
It also suggested that the OED Standard will also lower barriers of entry for model developers – including commercial vendors, third-party data providers and academia and other research institutions.
Aon said that initial testing on reinsurance placement data for Japan, Australia and China has proved highly successful as the initiative broadens its area of focus.
Dan Dick, executive managing director and global head of property analytics for Aon’s Reinsurance Solutions, said: “Aon is proud to be part of this important initiative, which will serve to help reduce volatility in data assumptions, improve consistency in modelled output and increase the operational resilience of our clients and markets.”
Ian Branagan, EVP and group chief risk officer at RenaissanceRe and co-chair of the Insurance Development Forum Risk Modelling Steering Group, added: “This is an outstanding example of continuing industry collaboration to drive the democratisation of risk insight around the world.”
Paul Nunn, head of Sustainable Insurance, SCOR, commented that the utilisation of an industry-wide standard for property risk reinsurance models aims to assist with solving the existing data and model interoperability challenges in the (re)insurance market.
Martin Bertogg, head of Cat Perils, Cyber and Geo at Swiss Re, said: “We are proud to be among the industry players helping to unlock risk model data. Globally shared data formats are an important step to overcome barriers for consistency, processing efficiency and a transparent cat risk dialogue.”
Jörg Steffensen, general manager, Group Risk Management at Hannover Re, added: “The new OED Standard enables not only a close interoperability between different risk stakeholders but also supports a wide field of open source projects in academia.”