Scenario analysis in CoMeta is here!
- Upload casualty portfolios directly in CoMeta
- Analyze economy-wide and portfolio-level loss estimates under a range of emerging risk scenarios
- Evaluate how a single emerging risk scenario can trigger losses in both your general liability and directors and officers books
- Bonus feature! Can't find an account in CoMeta? You can now evaluate terms and conditions and assess the effect of underwriting actions on portfolio aggregations via the account's primary industry alone
With this release, you can now upload casualty portfolios directly in CoMeta. Download the excel-based portfolio template, enter your portfolio information as before, and then upload that file all in CoMeta. CoMeta will let you know if your portfolio contains any errors (we’ll also send you an email) and, if so, how to correct them. When the calculation process is complete, you’ll find your portfolio in CoMeta’s new scenario analysis feature. Your newly uploaded portfolio will also be available in CoMeta’s portfolio underwriting feature and in Oortfolio. And, if you just want to keep using Oortfolio’s portfolio upload feature, go right ahead. Portfolios uploaded in Oortfolio will also appear in CoMeta.
Here are a few things to keep in mind when uploading portfolios in either CoMeta or Oortfolio:
- You must indicate the line of business for each policy: general liability (GL) or directors and officers (D&O). CoMeta’s scenario analysis feature reports both GL and D&O losses. The probabilistic loss model, though, only generates losses for GL policies at this time.
- You must enter an inception and expiration date for each policy. Policies with expiration dates after the upload date are considered “in-force” and policies with expiration dates on or before the upload date are considered “legacy.” Scenario analysis currently only considers in-force policies, whereas the probabilistic loss model available in Oortfolio accounts for both in-force and legacy policies. Policies with inception dates after the upload date will not be processed.
- We encourage you to use NAICS rather than SIC or ISO-GL for recording an account’s primary industry when that account does not have a Praedicat business ID. The new scenario analysis feature in CoMeta only considers NAICS. Accounts characterized by SIC or ISO-GL will not contribute to scenario losses in CoMeta. Our probabilistic loss model available in Oortfolio, however, continues to support SIC and ISO-GL. If you need help, ask your account manager for assistance with translating SIC and ISO-GL codes to NAICS.
- A portfolio is defined by its name and the most recent inception date in the portfolio. (e.g., Excess Casualty: 31-Dec-2020, Excess Casualty: 01-Mar-2021). If you upload a portfolio with the same name and most recent inception date as an existing portfolio, you will be prompted for whether you want to overwrite the existing portfolio.
- You can include multiple portfolios within a single portfolio template.
- If you choose to delete a portfolio, keep in mind that it will be deleted from both CoMeta and Oortfolio along with its portfolio template.
Oortfolio’s scenario analysis capabilities are now available in CoMeta. Click on "Scenario Analysis" in the left nav and you’ll be prompted to choose a portfolio. If you don’t see the portfolio you want, go upload it in the portfolio upload feature and then come back when that’s done. Once you’ve selected a portfolio, you’ll be routed to the main scenario analysis page. If you want, you can then set that portfolio to be your default portfolio so that you can skip the portfolio selection step the next time around.
Next to the portfolio name on the scenario page you’ll see a drop down for most recent policy date. It defaults to the portfolio with the most recent policy date, but you can select another date if you want to review estimates for earlier versions of your portfolio. You’ll also see there a selector for policy years. That selector is set to “In-force” since, for now, scenario analysis generates estimates for in-force policies only.
Underneath the policy year selector is a button for policy statistics. You’ll see basic summary statistics (e.g., policy count, sum of limits) there for the portfolio broken out by line of business. And then, in the headline statistics area you'll see an indicator for the number of scenarios to which the portfolio is exposed (as measured by at least one policy in the portfolio with positive ground-up loss) and the maximum number of policies exposed and triggered, and maximum portfolio loss across those scenarios.
The table lists every scenario to which the portfolio is exposed. Economy-wide loss for the scenario is reported in the second column. You then see an indicator for which lines of business are exposed, followed by the number of policies exposed, limits exposed, number of triggered policies, total (portfolio) loss, and loss latency (the number of years it takes for 50% of estimated portfolio losses to pay out). You can view these statistics for all policies, just GL policies, or just D&O policies.
For many scenarios, we estimate a range of losses employing alternative assumptions for key parameters, like the percentage of plaintiff damages recovered. Hovering over the scenario title in the table will reveal a tool tip that shows this range. The portfolio loss reported in the table is the median portfolio loss across all scenario variants. You can explore portfolio losses under alternative assumptions on the scenario detail page.
Clicking on a scenario title will take you to the scenario detail page. Here you can read the scenario narrative, download scenario documentation, and modify parameters of the scenario. The table reports portfolio loss statistics by line of business, company, and policy. Company losses account for all of the policies (e.g., GL and D&O, multiple layers) for the same company.
Finally, if you’re interested in just the economy-wide exposure and loss data for a scenario, you can access that information by clicking on "Scenarios" listed under risk profiles in the left nav.
Cross-line clash scenarios
Scenario analysis now reports estimates of portfolio loss for both GL and D&O policies. These cross-line clash estimates arise from a model that considers how bodily injury and property damage litigation can trigger “event-based” securities class action. In such a class action, shareholders typically allege directors and officers withheld information about the riskiness of its products and resulting liabilities and in so doing caused the company’s stock to trade at above market value. Upon disclosure, share price declines and shareholders suffer financial damage. Recent examples of companies targeted in concomitant event-driven securities class action include J&J (talc), Bayer (Round-Up), 3M (PFAS), Tyson (COVID), Carnival Cruise Lines (COVID), Walmart (opioids), and McKesson (opioids). Please refer to scenario documentation downloadable from the scenario analysis feature for more detail.
CoMeta’s inventory of named companies will grow considerably in 2021, but even with more than 100,000 companies available, underwriters may not find the account they’re looking for, especially if the account has relatively low revenue.
For these cases, CoMeta now offers “industry underwriting.” When you click on "Company Underwriting" in the left nav, you can now choose to underwrite by industry if you can’t find your account. Enter the industry (name or code) that best represents the account and you’ll be directed to the company underwriting page where you’ll see the selected industry at the top of the page. Enter terms and conditions as usual, hit calculate, and you’ll see loss statistics for your account under the assumption that the company’s losses are the average loss in the selected industry.