Munich Re has licensed the updated versions of AIR Worldwide’s (AIR) Multiple Peril Crop Insurance (MPCI) Models to enhance its risk management capabilities for its catastrophe-exposed agricultural treaties. These are weather-based models that estimate underwriting gains and losses, based on crop yield probabilities in the context of current conditions.
AIR says that, with the Version 15 release of AIR's CATRADER system, the model was enhanced to include multiple price volatility catalogs that allow for more refined reinsurance analysis, given increasing uncertainty in commodity market prices. Another update is the ability for the model user to modify industry premiums by adjusting default values as the U.S. government changes premium rates of the key program crops.
Also, the historical event catalog has been updated to incorporate all years from 1974 through 2011, according to AIR, and additional reporting tools have been added for easy manipulation and visualization of model results. The MPCI Model for China has been updated to include the latest policy conditions used in the market and an updated database of industry exposure.
