Forward looking modeling – the key to success in a rapidly changing world

Digitization and globalization of society and industry is making the risk landscape increasingly complex and interconnected, raising the accumulation risk potential of liability portfolios. The past is no longer a good predictor of the future. Swiss Re's unique forward-looking approach uses scenarios to model exposures, helping insurers better manage their liability portfolios and confidently expand into new markets and business segments. Ultimately, it helps us create a more sustainable liability environment, helping reduce unexpected change or crisis and thereby build a more resilient world.

"Forward looking modelling (FLM) helps insurers better understand and manage current and future liability exposures in the light of changing economic, societal and legal dynamics," says Jayne Plunkett, Head of Swiss Re's Casualty Reinsurance Underwriting.

FLM goes beyond traditional data analysis and predictive modeling, using scenarios and structured cause-effect chains to model unknown exposures. Rather than use past claims data, Swiss Re's unique approach starts with loss scenarios.

Filippo Salghetti, Head Casualty R&D at Swiss Re, explains: "We run the scenarios through the environment or the jurisdiction in which the risk originates -e.g. the location of the premises or customers– and look at risk drivers, such as the economic or legal environment. This allows us to anticipate and measure the impact of a change or a trend in a risk driver without having to wait for claims to emerge."


Swiss Re's proprietary Liability Risk Drivers™ model is a prime example of how Swiss Re applies FLM to help clients grow confidently in markets and segments in which they lack risk experience and data.

Our clients' extensive market knowledge, combined with Swiss Re's unique FLM approach and global perspective, lead to a better understanding of liability exposures. We work closely with clients to develop solutions that give our partnerships a competitive advantage, helping us confidently grow in emerging markets and improve risk selection.


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