August 2009 As the current Secretariat for the international organization Catastrophe Risk Evaluation and Standardizing Target Accumulations (CRESTA), Swiss Re joined hands with government bodies and other key industry players to organize CRESTA's Beijing conference on Natural Catastrophe Risk and Data Standards on 7 August.
Over 130 insurance professionals from China and abroad gathered at the event to call for the insurance industry to adopt a new catastrophe zoning system and improve data transparency as a vital step to sustainable management of natural catastrophe risk in China. The event was co-organized by CRESTA, along with the National Disaster Reduction Centre of China (NDRCC), Swiss Re and Munich Re, and received support from the “Research and Demonstration Project for Risk Prevention Key Technology” of China.
Founded in 1977 by (re)insurance companies, CRESTA determines country-specific zones for the uniform aggregation and efficient exchange of insurance data.
Early this year, CRESTA created new and more specific zones for China, increasing the number of zones from 60 to over 2400. At about the same time, the China Insurance Regulatory Commission (CIRC) published its first standards for natural catastrophe insurance data. Conference participants believe the new CRESTA zones and the CIRC data standard will go a long way to improving natural catastrophe risk management in China, by providing a consistent data platform for all insurance market players.
“Before the industry can jointly play a more important role in natural catastrophe risk mitigation for China, it is essential that we improve data transparency and raise standards so as to enhance risk management of insurance companies,” said Swiss Re Beijing Branch General Manager Qin Lu in his opening remarks at the conference.
Yao Qinghai, one of the key leaders of the “Research and Demonstration Project for Risk Prevention Key Technology” of China, and Director of the CIRC Hubei Branch, introduced the CIRC’s new data standard. He said, “This standard has laid a solid foundation for the insurance industry to improve risk management of natural catastrophe insurance, and for establishing a natural catastrophe insurance scheme for China.”
“Aggregated data using the CRESTA zones is best suited to describe and efficiently analyse large portfolios with similar insurance coverage, and full details on a policy-by-policy basis is also essential, as required by the data standard newly published by the CIRC,” said Peter Hausmann, Director of Property & Specialty of Swiss Re, when commenting on the new CRESTA zoning system.
Swiss Re Assistant Vice President of Property & Specialty Dr Junhua Zhou introduced the new CRESTA zoning system and its benefit to China in his presentation at the conference. Representatives from other market players also exchanged views with participants through presentations and panel discussions. One of the key conclusions of the discussions was that the conference had made an important step forward, even though it would take some time for insurers to adopt the new CRESTA zoning system.