CRESTA Zones

Example code or configuration here…

1. What is it?

CRESTA Zones are standardised geographic areas established for the purpose of insurance risk management, particularly in reinsurance. These zones allow insurers and reinsurers to assess, price, and model risks associated with natural hazards, such as earthquakes, floods, and storms, with greater precision.

Developed by the Catastrophe Risk Evaluation and Standardizing Target Accumulations (CRESTA) organisation, CRESTA Zones use consistent boundaries to streamline risk analysis and facilitate data sharing across the global insurance industry.

2. How can I use it?

CRESTA Zones are widely used by underwriters, actuaries, and pricing specialists to identify, assess, and manage exposure to natural disaster risks in specific geographic areas. By assigning each risk location to a standardised CRESTA Zone, insurers can apply consistent risk models, aggregate exposure data, and calculate potential losses for reinsurance purposes.

This is particularly valuable for managing portfolios and identifying high-risk concentrations in areas prone to catastrophic events.

3. How is the data created?

CRESTA Zones are created using geographical information system (GIS) data, taking into account historical data on natural disasters, population density, and land use. Boundaries are typically determined by aggregating administrative regions and are periodically updated to reflect changes in hazard patterns or urban development.

These boundaries are designed to represent areas of similar risk exposure and are aligned with commonly recognized national and regional administrative divisions.

4. Are there any limitations?

CRESTA Zones provide a standardised approach but may not capture localized risks precisely, especially in smaller or rapidly changing urban areas. The boundaries may not align perfectly with natural hazard zones for specific event types such as river floods or wildfires, where risk varies significantly even across short distances.

Additionally, CRESTA Zones are updated periodically, so changes to boundaries may affect long-term historical data comparisons.

5. What data points are available?

The data points available for CRESTA Zones typically include:

• Zone Code: A unique identifier for each CRESTA Zone.
• Zone Name: The name associated with each zone, usually linked to a city or region.
• Country Code: A standardised code indicating the country the zone is located in.
• Risk Level: An assessment of the general risk level associated with the zone.
• Geographical Boundaries: Latitude and longitude coordinates defining the zone’s boundary.

Please provide a link to your specific API documentation for further data details if available.

6. Where can I find out more?

For more information about CRESTA Zones and their application in risk management, you can refer to the official CRESTA website, which provides updates on zone boundaries and methodology: https://www.cresta.org/#/explore

Additionally, the Insurance Information Institute (III) and the OECD Insurance and Pensions Outlook offer useful resources on catastrophe modelling and risk management within the insurance industry.