Guy Carpenter model GC ForCas adds cyber, FI components

Guy Carpenter announced the launch of the Financial Institutions and Cyber components of the GC ForCas casualty catastrophe modeling platform. GC ForCas is a stochastic modeling platform developed to help insurance carriers better understand their exposure to casualty catastrophe losses resulting from the accumulation of US Commercial Lines insurance policies.

”The risk from casualty or liability-based catastrophe losses has become increasingly frequent and severe and can have a domino effect where single events cross several lines of business and produce very large losses,” said John Trace, COO of US operations for Guy Carpenter. “Our clients can better protect their capital from casualty catastrophe risk by using GC ForCas which gives them the ability to model the vast number of loss scenarios and line of business dependencies.”

GC ForCas, Guy Carpenter’s data-driven stochastic modeling platform, utilizes a variety of industry sources including Advisen’s large loss database of more than 250,000 historical losses to anticipate the vast number of scenarios and line of business dependencies. The first GC ForCas Sudden Disaster component was released in March 2015 and addresses losses from casualty catastrophes such as oil rig explosions that can result in billions of dollars in fines, cleanup costs and other compensation burdens.

The global risk and reinsurance specialist and a wholly owned subsidiary of Marsh & McLennan Cos. said the financial institutions component is designed to analyze the effect of casualty catastrophe events originating from financial or similar institutions under the related major insurance lines, including: directors & officers, errors & omissions, excess casualty, and fidelity.

“Financial institutions conduct their business in a highly connected marketplace, so an individual firm’s exposure to systemic industry losses is substantial,” said David Lightfoot, head of GC Analytics – Americas for Guy Carpenter. “The recent US credit crisis, as well as the Madoff scandal, reminds us of the susceptibility of our financial institutions to significant losses.”

Cyberattacks are an emerging risk that have gained worldwide attention and are increasingly impacting a variety of major industries such as healthcare, retail, finance, government, and education. “The recent headlines about major retailers and health insurance providers suffering large-scale data breaches have been a wake-up call to the cyber exposures that exist,” commented Will Garland, US head of specialties at Guy Carpenter. “The Cyber component of GC ForCas has been developed to examine first and third party cyber risk at the portfolio level,” Mr. Garland said.

Besides data breach, other cyber components that the model covers include privacy liability, network security liability, business interruption and data asset protection, he added.