Accurate Exposure Management is a critical component of any sound underwriting business’s management, having an impact on capital requirements, Lloyd’s and industry regulators, capital ratios, ratings, reinsurance requirements and costs and net results. This section cuts across Internal Audit and Independent Review processes, and can be approached from either direction.
Throughout his entire underwriting and management careers, PG Butler has consistently demonstrated a disciplined approach to planning, strict adherence to plan limits and aggregate exposures, and has developed quantitative underwriting techniques and aggregate monitoring systems to facilitate adherence.
These characteristics have combined to show very positive benefits; by maximising profits and limiting gross losses, as illustrated by the chart below.
The green columns represent 100% of PG Butler’s planned and written aggregates for generic classes of loss, e.g. US Hurricane, Northern European Windstorm, Japanese Earthquake, etc, using his proprietary exposure measuring techniques.
The red columns represent the percentage of that aggregate that was actually utilised by him in specific named loss events between 1992 and 2008.
Where there is no red column, the utilisation was “Nil” for that particular named event
There were no events in either 2009 or 2010 likely to have produced any significant loss to a portfolio underwritten using the same techniques.