Analyzing Coverage Performance

After designing your parametric insurance product, it's crucial to analyze its performance using historical data. The analysis tools allow you to validate your coverage design, understand potential payouts, and optimize your product before deployment.

Analytics Summary View

The Analytics Summary provides a comprehensive overview of how your coverage would have performed historically:

The interface displays key metrics for your coverage, including:

• Historical performance over selected years
• Payouts as a percentage of sum insured
• Statistics on trigger frequency and severity
• Burn cost calculations

Time Series

This section provides a chronological view of the index data across the coverage period, allowing users to analyze how the selected index has performed over time at the specified location(1). It also includes the option to download the time series data as a CSV file(2).

Payout Computation

This section calculates potential payouts based on the defined strike and exit values, comparator, and payout type. It visually represents when and how payouts would have been triggered historically.

There is also a view mode(1) that allows users to toggle between Index and Payout views, dynamically updating the graph based on the selection. Additionally, users have the option to enable or disable detrended values(2) for more nuanced analysis.

Risk Summary

The Risk Summary provides an aggregated view of the coverage performance based on the selected locations. It includes key metrics such as frequency, severity, risk rate, premium rate, and sum insured. These insights help users effectively evaluate the risk profile and financial exposure of the configured coverage.

Available Reports

All reports can be directly downloaded from the Term-sheet main view:

Aggregate Risk Report

The aggregate risk report summarizes the overall performance across all historical periods:

Key information includes:

• Frequency of payouts
• Average payout amount
• Maximum historical payout
• Total payouts over the entire period

Detailed Risk Report

The detailed risk report provides an in-depth analysis of your coverage on a period-by-period basis:

This report includes:

• Index values for each period
• Whether the trigger was activated
• Calculated payout amounts
• Percentage of sum insured paid out

Exporting Analysis Data

Analysis reports can be exported in various formats for further review and processing:

1. XLS Export: Comprehensive spreadsheets containing all analysis data
2. CSV Export: Raw data for importing into other analytical tools

Using Analysis for Product Optimization

The analysis tools enable you to:

1. Test Different Scenarios

   • Modify strike and exit points to see how they affect payouts
   • Adjust payout parameters and observe the impact on premium rates
   • Test your design across different historical periods

2. Benchmark Performance

   • Compare your design against standard industry metrics
   • Understand how your product performs in extreme scenarios
   • Validate your pricing assumptions

3. Iterate and Improve

   • Use analysis insights to refine your product design
   • Balance protection levels against premium costs
   • Optimize your coverage structure based on historical data

Best Practices

• Always analyze your coverage across at least 10 years of historical data
• Pay special attention to how the product performs during known extreme events
• Consider running sensitivity analyses by adjusting key parameters
• Review both average performance and worst-case scenarios
• Share and discuss analysis results with underwriting teams before deployment

Next Steps

After analyzing and optimizing your coverage design:

• Create a program based on your finalized design
• Generate quotes for potential clients
• Set up monitoring for active policies