Verisk first introduced the NGM financial engine in a limited capacity with Touchstone © 2021 and now fully integrated with Touchstone 2023 (11.0) (a.k.a. Touchstone NGM). In this release, the financial engine replaces the legacy financial engine. It was developed to keep pace with the increased demands and complexities of the (re)insurance markets, and with the need to incorporate more complex and realistic algorithms to modeling that were made possible with improved claims data, more detailed model data, more sophisticated algorithms, and increased computing power. With this release, clients can:

• Better manage their portfolios
• Improve both the accuracy and flexibility of their business workflows
• Provide fully probabilistic financial modeling at all levels Offer enhanced financial terms
• Capture of all insurance coverage and geospatial dependencies in loss accumulation

The new and improved engine includes a suite of enhancements discussed in detail in the following sections.

• For fixes and deprecated API definitions, refer to the Changes and Bug Fixes in the Touchstone API Changelog posting
• Hot fix and service packs
• Touchstone 2023 Release Documentation

• The loss aggregation algorithm accounts for dependencies between different insurance coverage types and for spatial correlation between risks.
• Dependent sub-perils are modeled independently.
• All combinations of coverage and site terms are supported through the combination of accumulation of coverages to total and the proration of totals to coverage
• Coverage and combined deductibles (as well as site) on any layer or sublimit.
• Ability to create two additional tiers to sublimit losses which allows users to model a policy. 
• Introduction of sublimit deductible scenario. 
• Aggregate policies are available for both single peril model analysis as well as for multi-model analysis.

We added the Aggregate Deductible and Aggregate Limit terms for the existing Layer and Sublimits classes in the AIR.Services.Common.Exposure.Data namespace.

Related method: SubmitDetailedLossAnalysis

Related request: SubmitDetailedLossAnalysisRequest XML

For information related to policy terms and conditions, refer to the Insurance term limits section in the NGM Financial guide on the Client Portal.

The Loss Analysis service client includes terms and conditions for:

• Location: min-max deductible, aggregate deductible/limit.
• Policy and layer: aggregate excess layer sublimit by secondary peril, 2nd/3rd tier, sublimits, coverage/combined deductibles, and coverage occurrence layer.
• Facultative and treaty: location treaty, aggregate risk limit/treaty retention/risk retention.

We added the following new terms for the location, policy and layer, and facultative and treaty terms.

Risk aggregation is performed by combining probability distributions with differing loss sizes. Therefore, deductibles and limits are applied directly on these distributions. For any analysis:

• The updated loss engine applies the smallest gross for analyses run with minimum deductibles.
• The updated loss engine applies the largest gross loss for analyses run with maximum deductibles.
• The updated loss engine selects the second smallest gross loss for analyses run with both minimum and maximum deductibles.

When you run:

• A analysis with location, sublimit deductibles, and minimum maximum deductibles at the layer-level, the engine applies deductibles for three scenarios, selects one based on the revised logic, and applies the layer limit.
• A analysis with location deductibles and minimum maximum deductibles at the sublimit-level, the engine applies deductibles for three scenarios, selects one based on the revised logic, and applies the sublimit.

Related methods: SubmitDetailedLossAnalysis and SubmitRingExposureConcentrationAnalysis

Related requests: SubmitDetailedLossAnalysisRequest XML and SubmitRingExposureConcentrationAnalysisRequest XML

Refer to the NGM Change Management guide for coding exposures.

We updated the  MinimumCores and MaximumCores in the DetailedLossAnalysisOptions class that take into account the resource requirements for computing analyses. The updated Loss Engine uses cores in place of nodes for computing each analyses. To optimize memory usage, we recommend assigning cores in multiples of two for all analyses. To ensure backward compatibility in the updated engine, the API requests accept an odd number of Minimum or Maximum cores.  Internally, the API mechanism rounds the odd number to an even number of cores. That is for a request with one core, the engine rounds up to two cores; and for all other odd numbers of cores, the engine rounds down to the nearest even number. Note that the Touchstone user interface accepts only cores in multiples of two for all analyses. 

Refer to the Technical Specifications for more information.

The analysis log file now includes valuable information such as a detailed errors/warnings summary, construction and occupancy codes, and statistics of modeled exposures. You can use the activity analysis log to:

• Analyze the quality of the import and export process.
• Find out any missing data such as event filters and unsupported construction or occupancy codes.
• Build a downstream programmatic process to troubleshoot errors.

We updated the existing GetFile and GetFileTemplates responses to include the remapped construction and occupancy codes associated with a specific Loss Analysis template.

Related requests: GetFileRequest XML GetFileTemplatesRequest XML

Previously, Touchstone allowed users to apply a single loss modification analysis template to the detailed loss analysis results during a loss modification analysis. Now you can apply a single template or multiple templates to the detailed loss analysis results using a new SubmitLossModAnalyses method. This enhancement enables you to control the loss modification factors for each template and apply specific templates for each analysis. From the Touchstone user interface:

• You can create multiple loss modification templates with different rules, event parameters, and factors. Configure the loss modification analysis with different templates to compare results based on factors defined in each template.
• You can modify the existing loss modification rules for the user-defined categories for a given location. And then configure a loss modification analysis with the specific modified template.

 We introduced the following changes for the Loss Analysis service client:

Enhanced workflow to include one or more loss modification templates

To retrieve the existing templates including the event parameters, loss modification rules, and factors associated with a business unit in Touchstone, you can use the GetLossModTemplates method.

<GetLossModTemplates xmlns="AIR.Services.ObjectManagementService.Api">    
<request>        
<BusinessUnitSid xmlns="AIR.Services.Common.Api">1</BusinessUnitSid>
</request>    
</GetLossModTemplates>

You can then specify a single or multiple template SIDs when you configure the loss modification analyses.  

<LossModTemplateSids xmlns:d2p1="http://schemas.microsoft.com/2003/10/Serialization/Arrays">
        <d2p1:int>27</d2p1:int>
        <d2p1:int>28</d2p1:int>
        <d2p1:int>29</d2p1:int>
    </LossModTemplateSids>

Related request: SubmitLossModAnalyses

Reference: Review requests for the NGM Financial Engine

You can specify save loss results by subperils in the detailed loss analyses.

Related request: SubmitDetailedLossAnalysisRequest XML

You can export the detailed loss analysis results by subperils.

Related method: SubmitLossAnalysisExport

Related request: SubmitLossAnalysisExportRequest XML

Reference: Review requests for the NGM Financial Engine

Touchstone now supports a new demand surge methodology for selected European models along with the existing demand surge functions. This new methodology calculates core economic demand surge factors by finding the largest industry loss event(s) for each country in each year of each model. If it meets a threshold, the calculated core economic demand surge factor is applied according to a model- and country-specific formula that is a function of that maximum annual industry loss. Additionally, a default or custom construction cost inflation factor for each country is added to the core economic Demand Surge Factor. The custom construction cost inflation factors can also be imported and exported across environments. Default industry exposure exclusions from the new demand surge calculations are auto, forestry, greenhouses, and offshore. Touchstone users can also customize new demand surge industry exposure exclusions by construction code, occupancy code, and user-supplied LOB.

Related method: SubmitDetailedLossAnalysis

Related request: SubmitDetailedLossAnalysisRequest XML

Reference: Review requests for the NGM Financial Engine

For many clients, the list of administrative boundaries has expanded over time. They define the pre-select geographic boundaries for the marginal impact analyses. The current workflow only allows users manually create or update individual administrative boundaries and then share boundaries with the new Touchstone environments or BUs. Therefore, reusing the existing administrative boundaries across different BUs has been time-consuming. To streamline and promote data exchange, we introduced a suite of enhancements for the Object Management service client. 

Updated workflow for sharing the administrative boundaries across BUs and Touchstone environments

Import administrative boundaries

You can import administrative boundaries for a business unit into Touchstone using a new SubmitImportAdminBoundary method. Associate perils for each administrative boundary. Configure loss modification analyses with the imported boundaries in a different Touchstone environment or business unit (BU).

Related request: SubmitImportAdminBoundaryRequest XML

Identify a specific administrative boundary

You can use the existing GetAdminBoundaries method to identify a specific boundary name and its BU. 

Related request: GetAdminBoundariesRequest XML

Export administrative boundaries

You can export the administrative boundaries available in a BU using the new SubmitExportAdminBoundary method. And then use the exported boundaries to configure loss modification analyses in a different Touchstone environment or BU.

Related request: SubmitExportAdminBoundaryRequest XML

Previously, clients had to manually update the parameters defined in the Boundary Peril template to use it in different business units or Touchstone environments. This process has been tedious. For audit reasons, some clients want to be able to share the Marginal Boundary Peril templates between different Touchstone environments and/or between different BUs in the same Touchstone environment.

Updated workflow for sharing the Marginal Boundary Peril templates across BUs and Touchstone environments

Import Marginal Impact Boundary Peril templates

We implemented a new SubmitImportMarginalImpactBoundaryPerilTemplate method that lets you import the Marginal Boundary Peril template across business units and Touchstone environments.

Related request: SubmitImportMarginalImpactBoundaryPerilRequest XML

Export Marginal Impact Boundary Peril templates

You can export the existing Boundary Peril templates out of Touchstone using a new SubmitExportMarginalImpactBoundaryPerilTemplate method. The Boundary Peril template contains a list of the existing countries or regions mapped by sub-perils that is relevant to the geographic locations. You can configure the export job including the template name, destination business unit, and file path where you want to export the Peril objects template.

Related request: SubmitExportMarginalImpactBoundaryPerilRequest XML

You can configure a marginal impact analysis with sub-perils for each location. After successful analyses, Touchstone generates summary exceedance probability data (aggregate and occurrence), event totals, and distributions based on the geographic resolution used to save the loss results for both sets of the marginal impact results. Therefore, you can:

• Assign different sub-perils for each portfolio and run different portfolios to retrieve losses associated with each subperil.

• Run contracts against reference portfolios for each unique subperil.

Related request: SubmitMarginalImpactAnalysisRequest XML

Reference: Review requests for the NGM Financial Engine

Custom boundaries are particularly helpful in assessing the impact of ongoing or new events such as wildfires, floods, or hurricanes. We enhanced our suite of geospatial APIs to help further streamline your workflow that use custom boundaries. This release includes a number of custom boundary related APIs to automate geospatial analyses. Thereby, clients licensing the geospatial module can now retrieve the existing custom boundaries, apply perils on custom boundaries, specify a single custom boundary or multiple boundaries, and configure geospatial analyses.

Retrieve a list of the custom boundaries

You can obtain the existing custom boundaries in polygon spatial shape available in a Touchstone BU using a new GetCustomBoundaries method.

Related request: GetCustomBoundariesRequest XML

Retrieve a specific custom boundary details

You can retrieve details of each custom boundary using a new GetCustomBoundariesDetails method. The response returns the custom boundary options including legend information, damage ratio, custom boundary name, unique SID, the spatial file type, and the peril associated within this boundary. You can reuse these predefined custom boundary details in various geospatial analyses

Related request: GetCustomBoundariesDetailsRequest XML

Configure geospatial analyses with a specific custom boundaries

The new SubmitCustomBoundaryExposureConcentrationAnalysis method enables you to configure the geospatial analyses with a single custom boundary or multiple custom boundaries. You can apply peril for each custom boundary and configure the geospatial analysis options such as the exposures, currency, and the result data source for storing the results of your geospatial analysis request job.

Related request: SubmitCustomBoundaryExposureConcentrationAnalysisRequest XML

Retrieve results of the geospatial analysis

The new GetCustomBoundaryResults method enables you to retrieve the accumulation results of geospatial analyses with custom boundaries. You can specify the pagination and order in which you want to sort the retrieved geospatial analysis results. The response returns the pagination details, accumulator type, gross, ground-up, and other terms.

Related request: GetCustomBoundaryResultsRequest XML

Support for additional deductibles

We made changes to our Geospatial engine to align more closely with the updated NGM loss engine. In the same way that we updated algorithms for detailed loss analysis, we included in geospatial analysis a revised logic for calculating the minimum maximum deductibles at both the layer and sub-limit levels.

In the same way that we updated algorithms for detailed loss analysis, we included in geospatial analysis a revised logic for calculating the minimum maximum deductibles at both the layer and sub-limit levels. Also, the updated Loss and Geospatial engines no longer take into account the AIR Default Behavior for residential contracts; this is because all residential contracts apply location deductibles before location limits.

Support for the bounding box capability

The bounding box functionality enables you to run the same exposures for different locations to evaluate limits and marginal impact. Since this functionality was not available in our public API services, clients had to depend on a workaround process where they identified grid points for locations of interest and then had to manually maintain a list of these grid points to include in their automated workflow. This workaround was time-consuming to perform on production environments and allowed users to add up to only 50,000 grid locations per analysis. To solve these limitations, we created a new BoundingBox class in the AIR.Services.ExposureConcentrationAnalysis.Data namespace. This class includes the Point1Latitude, Point2Latitude, Point1Longitude, and Point2Longitude parameters that you can specify and configure the geospatial analyses.

Related request: SubmitRingExposureConcentrationAnalysisRequest XML

Clients export aggregate exposure information from Touchstone, including sums insured, risk count, and premium data, into a format that can be imported into Touchstone Re for further downstream analysis. The current workflow allows you to export the aggregate information only via the Touchstone user interface (UI). Therefore, the exported data from the Touchstone UI requires manual intervention to feed into automated workflow. To address this gap in the data transfer process, we implemented a more comprehensive workflow for the Data Export service client.

Transfer data across BUs and Touchstone environments

You can export aggregate exposure information to a UNICEDE/2 file using the SubmitExportUnicede2 method. This method stores the export options such as company data, the user-provided line of business, the source folder path containing the aggregate exposures you want to export, and the destination file path to which you want to export the aggregate exposure data.

Depending on where you placed the exported exposures, you can either associate the exposures directly with a Touchstone Re company or import the UNICEDE/2 file into Touchstone Re if you license both the applications. The file extension for exposure data that you export to UNICEDE/2 format is .txt. For more information about the UNICEDE/2 format, visit www.unicede.com.

Related request: SubmitExportUnicede2Request XML

Associate Touchstone exposures with Touchstone Re

You can associate the Touchstone exposures to companies in Touchstone Re using a new SubmitAssociateExposureToCompany method. This method includes company association data such as the market share, loss set name, and the company BU in Touchstone Re with which that you want to associate the Touchstone exposures.

Related request: SubmitAssociateExposureToCompanyRequest XML

Support for the custom lines of business in UNICEDE/2

This release includes the following enhancements for managing exposures in UNICEDE/2.

• You can store and retrieve the lines of business defined in UNICEDE/2 by country. We implemented a new GetUnicede2LOBByCountry method to retrieve the UNICEDE/2 data by lines of business.
• You can retrieve the user-specified lines of business by country using a new GetUserLineOfBusinessesByCountry method.

Related requests: GetUnicede2LOBByCountryRequest XML GetUserLineOfBusinessesByCountryRequest XML

Previously, we provided clients with database downgrade scripts to run outside the Touchstone user interface, which allowed clients to downgrade their exposure databases from the current version to a prior version. However, clients with numerous exposure databases found that their downgrades using the database scripts were time-consuming. Some clients always want to be on the latest version of Touchstone so that they can take advantage of new models and functionality. At the same time, these clients also had vendors who were on different Touchstone release versions. Now clients can use the SubmitDowngradeDatabases method to downgrade their current version of the exposure databases to a prior version. You cannot use the public API service to downgrade the Touchstone Result database. 

Related request: SubmitDowngradeDatabasesRequest XML