Japan earthquake custom first loss event set

Steps to run a program loss analysis for Japan earthquake.

Companies > [Company] > [Program] > Loss Analysis > Analysis Settings

Touchstone Re offers eleven Japan earthquake catalogs with First Loss coverage percentages ranging from 2.5% up to 100% in order to effectively model the evolving Japanese insurance market following deregulation. A common use case is to group prefectures with similar First Loss coverages before applying aggregate reinsurance terms. To accomplish this, configure a loss analysis to apply a different first loss coverage percentage to each prefecture for a single program.

1. In the Analysis Settings pane, select the Japan EQ Custom First Loss (10 K Verisk Custom Time Dep) event set.

2. Click the ellipsis button that appears to set the First Loss % by prefecture.

3. Enter or paste a ratio (a value between 0.0001 and 1) for each prefecture to be included.

4. Click the Map Event Sets button.

   Touchstone Re will select the closest matching event set for each prefecture, by converting the ratios provided into First Loss %. In the example above, a ratio of 0.5 for Aichi would be mapped to the 50% CFL event set.

5. Click Ok to save your changes.

Another option in this dialog is to select the event sets directly from the drop-downs without entering any ratios.

Note that the initial analysis only produces ground up company loss, so DLF export and import is still required to apply aggregate reinsurance terms.