Hiscox signs up for Praedicat AI- driven cat risk modelling platforms

Hiscox has licensed two of Praedicat’s AI-driven liability cat risk modeling platforms, CoMeta and Oortfolio, for use within its London Market casualty business.

The AI technology mines peer-reviewed published scientific literature to extract signals of emerging risk and then maps them to commercial activity. It then quantifies the potential losses from mass tort litigation, equipping insurers with a scalable early warning system that identifies potential future risks.

As liability insurers underwrite companies introducing new technologies and innovations at an ever accelerating rate, they are increasingly underwriting risks for which there is no relevant historical claims experience to guide them, Praedicat explained. It said its predictive technology is critical to identifying emerging risks and managing accumulations arising from them.

Praedicat will contribute to Hiscox’s underwriting strategy by helping to identify areas of opportunity and increase portfolio diversification. Hiscox will use Praedicat’s portfolio underwriting and aggregation monitoring workflows to identify emerging risks, and to evaluate and benchmark individual account risk, using the 40,000 individually profiled companies and their associated loss estimates in Praedicat’s database.

Using Praedicat’s probabilistic loss model results, Hiscox can assess the impact of latent liability exposures to its book of business, and stress test its portfolio against Praedicat’s library of 88 latent liability RDS and XDS scenarios.

Craig Knightly, casualty division director at Hiscox London Market, said: “Praedicat provides Hiscox with the ability to strategically assess our existing portfolio to manage our exposure while also being able to stress test the book against Praedicat’s liability cat scenarios, such as opioids, the COVID-19 pandemic, and PFAS, to name a few.”