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Swiss Re: helping corporates take better control of their risks

InsTech’s Ali Smedley sat down with Abhijit Akerkar, Head of Risk Data & Services, to discuss why Swiss Re Corporate Solutions has created RDS, how risk managers can use the platform and what data and model provider partnerships Swiss Re is looking for.

Member Spotlight: Swiss Re

Swiss Re Corporate Solutions launched Risk Data & Services (RDS) in 2022 to support corporates with risk management. It currently offers solutions around property exposure management, sustainability and supply chain resilience.

Why did Swiss Re Corporate Solutions create RDS?

During discussions with our corporate clients about their key challenges, a consistent theme kept surfacing: corporates want to manage their risks better. Having asked them what is stopping them from doing this, we heard three common issues.

First, they want to better understand what risks they face. Corporates need tools or models to assess and quantify risk, but they do not have easy access to these.

Secondly, the data that corporates have is often disorganised and unstructured, sitting in various spreadsheets and systems. This means that even if they did have access to models, they would not be able to make the most of them.

Lastly, companies need to interact with various internal business units and external parties to understand and communicate risk. However, their existing systems are not fit for data sharing and collaboration.

In order to help corporates overcome these three hurdles, Swiss Re Corporate Solutions decided to build RDS, with the aim of enabling organisations to take back control of their risks. Our platform gives corporates access to Swiss Re’s analytical tools and models, such as natural catastrophe hazard data. It also provides sophisticated infrastructure to store risk data in a standardised and secure manner in their own private tenants. Through our platform, risk managers can also invite brokers and risk engineers to work together, all in one place.

Who uses the RDS platform?

We have three types of users: risk owners, risk partners and service providers. Risk owners are those responsible for managing risk within a company and can come in different forms, such as insurance managers, sustainability managers, CFOs and supply chain risk managers.

Risk partners are those that risk owners invite to the RDS platform to collaborate. This includes brokers, risk engineers and consultants.

Third-party data and model providers also use RDS to provide their services to corporates.

Abhijit, what is your background and what does your current role involve?

I have built and grown tech-enabled businesses in Asia and Europe, followed by a consultancy role at McKinsey. My current position extends from that background. In my role as Head of Risk Data & Services at Swiss Re, I lead a multidisciplinary team of risk specialists, product owners, technologists, designers and sales to help companies gain a more granular view of their risks. In doing this, we also work very closely with our ecosystem of partners.

How does the RDS platform practically work?

The first thing any client does when starting to use RDS is create a digital twin. This is a digital representation of a physical asset. The minimum requirement for building a digital twin on the platform is the location coordinates of the asset. The more attributes a user adds, the more precise and therefore valuable the digital twin becomes.

Attributes that users typically upload include building valuation data, equipment and inventory valuations, structural characteristics and occupancy type (such as whether the asset is a hospital, warehouse or solar farm). Companies can update these attributes throughout the property lifecycle. We can also help clients to create the digital twins.

Another important attribute of the tool and creating a digital twin is the accuracy of location data. Corporate clients’ physical assets tend to be large. A single geographic point does not give an accurate view of the entire property’s risk. The RDS platform lets users draw a polygon of their locations. This allows them to see how flood risk differs across hundreds of metres, for example.

Once the digital twin is created, users can enrich it with the outputs from models that they now have access to. For example, they can use our natural catastrophe hazard layers to see loss estimates for each of their assets.

How can the RDS platform help with managing property exposure?

Risk managers use the RDS Property Exposure Management solution differently based on their business context.

For example, the Head of Risk and Insurance at a multinational pharmaceutical company is using insights gained through RDS to prepare for market presentations and to improve insurance placements. This involves using the platform to understand natural catastrophe exposure and potential losses. As well as this, they run simulations using different business interruption methodologies to form a better view of accumulation risks.

The Head of Risk at a global power company is using RDS to locate risk hotspots among its physical assets portfolio and to identify which perils could be most damaging. They can then use these insights to prioritise capital deployments for loss prevention measures.

Another example would be a global agriculture business that transports grains from farm to fork through a series of leased warehouses. The risk landscape changes as grains move from warehouse to warehouse. The company uses RDS to track the constantly changing risk landscape for exposure reporting and for aiding strategic decisions about warehouse lease renewals.

All of this is done on the same property exposure module on RDS, but use cases vary depending on the company and risk manager using the platform.

How can clients use RDS to understand climate-related risks?

For the current risk, we offer our natural catastrophe hazard layers. We provide risk scores for future physical climate risk. These scores reflect acute and chronic physical risks and support an assessment in 5-year steps spanning from today up to the end of the century for three different Shared Socioeconomic Pathways (projections used to derive greenhouse gas emissions scenarios).

Our climate risk framework combines the latest climate models used for the IPCC’s assessment reports, Swiss Re’s experience in natural catastrophes and our proprietary hazard layers. The future climate risk scores cover 12 perils, including flood, storm surge and heat stress. We also provide underlying climate variables, such as sea level rise and precipitation change.

The RDS platform allows users to generate location and portfolio-level reports that inform physical risk insights and support climate-related disclosures to be made under the TCFD and EU Taxonomy’s Do No Significant Harm assessment.

Corporates might also use this data on climate resilience for their financial planning, investment decisions, geographic diversification strategy and for prioritising capital expenditure for loss prevention.

What sustainability data is available on the platform?

In addition to current and future climate risks, RDS provides a biodiversity index for users to understand the current state of biodiversity and ecosystem services at an asset location. Assessments can be made of the dependency and impact related to a corporate’s economic activities. For example, if a client owns an automobile factory that needs a lot of water, RDS will help them to understand if the area will have enough water in the future to continue serving the factory. Conversely, companies can use the platform to explore if the factory will use up all the water in the area, which might lead to liability or reputation risk.

This biodiversity module covers a range of different ecosystem services, including water security, pollination, soil fertility, water quality and erosion control.

How can clients use the platform to support supply chain resilience?

When corporates create a digital twin of their assets and their suppliers’ assets, it helps them to identify the geographic accumulation of their supply chain. They can then explore what the interdependency risk amongst their suppliers is.

Clients also use the platform for exposure assessment. For example, they can see what the exposure of one of their supplier’s factories is to climate, geopolitical or cyber risks.

The other main use of the Supply Chain Resilience module is scenario planning. If there is a geopolitical event or certain ports are blocked, users can explore how this would impact the flow of materials and plan which alternative suppliers they could use.

What companies does RDS partner with to provide data and models on the platform?

We are in the early stages of building our partner network.

We are in discussions with service providers across a range of areas, including flood, cyber, geopolitical risk and property valuation data. We are interested in hearing from other data and model providers within these areas who would like to offer their services through RDS, which would give access to thousands of corporate users. We would also like to hear from risk engineers and consultants who could provide their services through our platform.

Does RDS plan on offering more capabilities over 2023?

Soon we are launching a functionality that will generate automatic reports on data readiness. When users upload their portfolio data to create digital twins on the platform, we can tell them how complete the information is.

I recently attended InsTech’s event focused on risk managers. One of the risk managers on stage was saying how they would like to understand what information insurers are looking for. RDS is working on an automated report solution to help risk managers with that.

What should readers do if they want to learn more?

To learn more about the capabilities of RDS, you can visit our website. I’d also love to hear from people directly – whether it is a potential client, data partner or someone who wants to join our growing team. You can also follow Swiss Re Corporate Solutions on LinkedIn.

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