Praedicat Inc., the Los Angeles-based emerging liability risk analysis firm, has announced the launch of its new Risk Scenario Analysis platform, which expands the scope of cross-line conflicts from its suite of scenarios.
The platform also makes it easier for Lloyd’s of London unions to produce fully compliant reports on six market-created liability scenarios. These scenarios are as follows: improper sale of financial products (United Kingdom); manipulation of financial markets (United States); pharmaceutical product (United States); global construction product; chemicals in food (United States); and offshore / onshore energy (United States).
Praedicat’s new risk scenario analysis platform enables clients to access a range of emerging risk-liability conflict scenarios, including COVID-19 liability; Litigation concerning the contamination of drinking water by PFAS (per- and polyfluoroalkylated substances); construction product litigation; mobile phones; next-generation opioids and many other “next asbestos” scenarios.
Customers can upload their claims books to the platform to understand how their claims business is exposed to these emerging risk scenarios. There is also a feature to modify the assumptions of the software to test the portfolios against the risk of social inflation.
“With social inflation leading to an upsurge in mass litigation in the United States, it is more important than ever to monitor aggregations of latent accident risks. Praedicat’s new Emerging Risk Scenario Analysis platform can help you, ”said Robert Reville, CEO of Praedicat. “We plan to publish new scenarios on the platform throughout 2021, including a set of climate responsibility scenarios later this year.”
In 2021, UK regulators are asking companies to implement forward-looking risk management frameworks for man-made risks. Praedicat’s new scenario platform directly addresses this requirement, with a strong business focus for emerging damage risks.
The six liability scenarios were developed with Lloyd’s in response to growing regulatory attention to how insurance companies manage their exposure to man-made risks. Lloyd’s will collect union responses to liability scenarios over two periods in 2021.
“Praedicat’s Risk Scenario Analysis Platform helps unions choose the appropriate scenarios to report to Lloyd’s based on the union’s book,” said Lauren Restell, Director, Rating & Regulatory Affairs at Praedicat. “Our bottom-up approach goes further to identify risk factors in business and industry scenarios, providing actionable insights to decision makers while simultaneously meeting all of Lloyd’s reporting requirements.”
Praedicat helps clients generate Lloyd’s compliant output, requiring the provision of basic portfolio information: company name, type of insurance (directors and officers, civil liability and environmental liability), point of attachment , trigger, limit, share and defense cost assumptions. The Praedicat platform allows unions to report Lloyd’s liability scenarios as needed – both gross and net of reinsurance – and for all affected jurisdictions and lines as defined by the scenario descriptions.
“Understanding the risk of accidents to enable effective exposure management is a priority area for Lloyd’s in 2021 and beyond. It is great to see new tools being developed to create an emerging risk framework to dynamically identify, monitor and manage future loss accumulations, ”said Kirsten Mitchell-Wallace, Managing Director portfolio risks at Lloyd’s of London.
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