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Singapore Airport Quarantined - a Doomsday Scenario for Global Insurers

Announcement posted by Russell Group 22 Oct 2015

Russell Group urges underwriters to harmonise data to better assess risk .
Picture the scene: A flight arrives at Singapore Changi Airport from a provincial city in mainland China. On board a woman has been fighting for her life with a dangerously high temperature, aching muscles and serious respiratory difficulties. Upon arrival she is diagnosed with the deadly H7N9 strain of avian, or ‘bird’, flu.

What happens next?

With over 100 airlines linking Singapore to 320 cities in 80 countries and territories worldwide, Changi is a phenomenal transit hub. A highly-infectious disease like avian flu triggers an immediate emergency at Changi. But it is not sufficient to quarantine the ill woman, because many of her fellow passengers could also have been infected in-flight. And they have now passed through immigration and gone on to the collect their baggage from the carousel. 

Each week, some 6,700 flights land or depart from Changi, while over 54 million passengers travel through the airport each year and almost two million tonnes of freight are shifted annually. One highly-infectious person in such an intense dispersal environment could wreak untold damage.

As an emergency remedial measure, the airport authorities decide, reluctantly, to shut the airport. All flights into Changi are diverted to airports in Malaysia, Thailand and Indonesia, while those preparing to depart are grounded. All freight movements, similarly, are suspended.

Imagine the devastating effect on the reputation of a sparkling international airport boasting a clutch of prestigious awards as Top Worldwide Airport, the World’s Best Airport 2015 and the Best Airport in Asia Pacific. All those cancelled flights, all those redundant tickets, all that lost business. All the incalculable consequential liabilities. All that fear.

With each passing day Changi is under ‘lock-down’, regional businesses haemorrhage cash. Time -critical supplies of pharmaceuticals, medical equipment, transplant organs, blood, let alone fresh food and urgent machine, automotive and industrial parts languish in the freight terminal. Bills get delayed – or unpaid. The chorus of contract breaches is deafening.

So too are the insurance implications; these are pressing, the potential claims stratospheric. Who is the insurer of last resort in such a catastrophe? How can overlapping liability issues be resolved? Does anyone, anywhere have a calm, balanced insight into all the probabilities for such a doomsday scenario affecting Singapore Changi, one of the best organised airport hubs in one of the most dynamic economies on the planet?
The answer is, perhaps improbably, yes.

Russell Group, the UK-based data analytics firm, highlights underlying risk volatility in the aerospace sector and continuously calls for a more integrated approach to underwriting risk management by the insurance industry.

Managing Director, Suki Basi, stresses the need to unify the often fragmented, siloed information stored by insurers in the aerospace ‘ecosystem’ to better help them intelligently assess risks posed by multiple ‘what if’ scenarios, such as an airport being quarantined. 

He says: ‘The insurance industry urgently needs to look at restructuring - or ‘harmonising’ - the data sets at its disposal to take into account the domino effect upon all liability, financial, operational and purely commercial ecosystems affected by a crisis. The absence of a wide range of potential events and their consequential knock-on effects in many scenario modelling exercises is, today, quite alarming.’

Russell Group offers technology that gives underwriters in Asia the critical ability to factor in realistic, probabilistic - and even unexpected - events when pricing insurance policies.

Through its ALPS suite of products, Russell Group delivers better scenario modelling to give more accurate pricing in underwriting risk management across the specialty insurance classes. These include aviation, casualty, marine hull and liability, energy, space and speciality property classes. 

What specialty insurance exposures created by the growth in Asian airports demonstrate is the need for scalable and integrated analytics and actuarial modelling capabilities that, underpinned by reliable data, can help transform 21st century risk management into a real science.

*Russell Group is taking part in the Singapore International Reinsurance Conference, Nov 2-4 2015. 


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Russell Group is a leading risk management software and services company fast expanding its operations across Asia. Through its ALPS suite of products, Russell Group provides a truly integrated framework for insurance and reinsurance clients operating across the specialty classes.

With an underwriting risk framework that delivers a complete understanding of underwriting exposure, Russell Group helps clients generate clearer risk insights and assessments, robust capital utilisation and improved portfolio return on equity.

As a pioneering UK-based data analytics company, Russell Group offers insurers and reinsurers across Asia proprietary technology that factors in the realistic, probabilistic and unexpected for better scenario modelling to give more accurate pricing in underwriting risk management.

If you would like to learn more about Russell Group’s ALPS solutions, please contact rbrown@russell.co.uk