Aon Benfield's Dynamic Portfolio Optimization (DPO) brings its clients to the next level of strategic exposure management. DPO gives you the knowledge to identify key risk drivers within your property portfolio as well as areas that could be profitably written without having a significant effect on probable maximum loss (PML). 

This proprietary tool, first introduced in 2000 by the catastrophe modeling team, is enhanced annually as our clients’ needs evolve. DPO-designed strategies quantify the impact to the entire PML curve, the decrease in reinsurance limit needed, the cost of reinsurance purchased, and the impact on the company’s retained net average annual loss. DPO has produced impressive results in almost every portfolio, regardless of geographic scope or peril exposure.

Aon Benfield’s DPO is unique in that it addresses the correlation of risk through concentration. While other optimization strategies might identify the ‘worst’ policies on an individual basis, they do not account for how those policies correlate to the remaining portfolio. Our DPO software identifies the policies that have the most negative impact on portfolio level results.

DPO is very adaptable to the needs of any property insurance company.

Models Used:		RMS or AIR, and a blend of these models
Perils:		Hurricane and/or Earthquake
Risk Appetite:		Specific return time (e.g. 100-year) selected by the company
Profitability Metric:		Including or excluding non-catastrophe loss ratios
Underlying Reinsurance:		Quota Share, Per Risk, Facultative and the Florida Hurricane Catastrophe Fund
Key Risk Driver Candidate Restrictions:		Flexible identification of the policies considered, such as selecting personal lines policies only, avoiding profitable agencies, or excluding policies with supporting business, etc.
Growth Policy Candidates:		Prospective new portfolios, policies similar to the current portfolio, standard sample policies, or standard sample policies.

In addition to customizing analysis parameters and policy selections, reports can be customized to include: detailed policy lists summarized by state, county, territory, or line of business, or profiled for underwriting purposes. Results can be shown as maps or used to generate impact scenarios for reinsurance cost.