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Chief Operating Officer
Aon Benfield Analytics
Minneapolis

Head
Aon Benfield Analytics Catastrophe Management
Dallas

Head
Aon Benfield Analytics Americas and Actuarial/ERM
Chicago

Head
Aon Benfield Analytics International
London

Head
Aon Benfield Analytics Ratings Agency Advisory
Toronto

The Cats Who (Better) Know the CAT Score

When it comes to catastrophe analytics, these cats know the score, according to several clients. Aon Benfield Analytics has "superbly developed their in-house tools," said Jeff McCarty, assistant vice president and actuary at Bloomington, Ill.-based State Farm.

"Their knowledge of all models is very strong," added McCarty. "They understand the uniqueness of the models. Their tools for cat modeling are especially good."

They're easy to work with, he added, "very complete, always willing to help out. They've got a very good team."

Added Phil Vedell, chief administrative officer and senior vice president at Max Specialty Insurance Co., a Richmond, Va.-based member of Max Capital Ltd. of Bermuda: "They really understand what we do."

"I've particularly enjoyed working with Dan Dick (Aon Benfield Analytics Head of Catastrophe Management)," added Vedell. "He has a lot of energy and can describe things clearly. He has the ability to breakdown complex matters so that everybody in the room, at whatever level they may be at, know what he's describing."

Aon Re Global's acquisition of Benfield last year in effect turned the company into a reinsurance superbroker, with Aon's traditional analytical strengths in casualty reinsurance risk supplemented by Benfield's traditional strengths in property risk.

Over the past year, a big accomplishment of Dick and his team has been leading a group of analysts and actuaries through the development of predictive modeling capability for exposures to catastrophes--a process called Cat Scoring.

This project started with an evaluation of hurricane claims from 2004, 2005 and 2008. After the claims regression study was completed, Dick and his group utilized this information to develop adjustment factors to output from catastrophe models. This adjustment accounts for unmodeled coverages, loss-adjustment expenses, and missing or incorrect exposures, among other items.

A primary underwriter can utilize this adjusted modeled output when evaluating a risk. The catastrophe scoring methodology goes beyond just the expected loss for a risk. It includes an evaluation of the correlation of the risk to the underwriter's existing portfolio.

Cat Scoring uses this correlation to assess the incremental cost of reinsurance needed to support the risk, as well as the cost of capital needed to support the risk. This allows the underwriter to have a complete understanding of the price needed to support the addition of a catastrophe-exposed risk to their portfolio.

The delivery of catastrophe scoring can be through a secure Web site, a spreadsheet tool on the underwriter's desktop or through the integration into the insurer's underwriting system.

CEO
Aon Benfield Investment Banking Group
New York

President
Aon Benfield Investment Banking Group
Chicago

Stepping up and Stepping in to Fill a Void

Together Rob Bredahl and Paul Schultz successfully managed the integration of Benfield Advisory and Aon Capital Markets when Aon Re Global and Benfield merged in November, 2008. It was important that the integration progress seamlessly in order for the new entity to capitalize on the opportunities, which were starting to present themselves with investors digesting the turbulence in the market in the wake of the collapse of Lehman Brothers.

Since its inception, Aon Benfield Investment Banking Group (IBG) has been highly successful in further developing the insurance linked securities (ILS) market forward.

Among the accomplishments in the past year, IBG was one of the managers on Residential Re 2009. This marks the first time that IBG and predecessor firms were an underwriter on the Residential Re deals. Residential Re wanted to differentiate its collateral in the market, and was the first transaction to utilize U.S. money market funds with the reference rate for the interest calculation based on the money market yield.

In other accomplishments of 2008, IBG was joint lead manager for Caelus Re, brought to market on behalf of Nationwide and in association with Goldman Sachs. This was Nationwide's first issuance in the catastrophe bond market.

IBG was the sole placement agent for Torus Insurance, the largest new company formation in 2008. Torus, launched with more than $700 million in capital, was formed to provide specialty insurance to energy and marine clients, for both onshore and offshore risks.

"Why are these guys so good at what they do?" said Jay Nichols, executive vice president of Bermuda-based Renaissance Re Holdings. "The best part of working with them is they work well with the clients, but also the markets. There's a lot of positive 'Why not?' attitude coming from them.

"Rob Bredahl is an absolutely first-class guy, very thoughtful, very partner-oriented. A lot of times, reinsurance brokers will tell you what to do rather than partner with you. Not these guys."

"They have complete expertise," added Terry Younghanz, president and CEO of Kansas City-based Rockhill Holdings Co. "These guys have done a lot of analytics for us. They used many, many tools. They helped us take a hard look at the financial sheet with a licensed tool called ReMetrica.

"Thy also have excellent analytical tools for the catastrophe business. Their wide-ranging resources are particularly valuable in helping a smaller firm like ours focus on our business."

Managing Director
Guy Carpenter & Co.
New York

Vice President
Guy Carpenter & Co.
New York

Managing Director
Guy Carpenter & Co.
New York

Managing Director
Guy Carpenter & Co.
London

Managing Director
Guy Carpenter & Co.
New York

Senior Vice President
Guy Carpenter & Co.
London