# OED Liability

## Introduction

The first version of the OED schema for liability data was released in April 2022 following the
efforts of a small market working group. The
[release video](https://youtu.be/WW9N4mlNtb8) can be found on the Oasis YouTube channel. This
was the first data schema available to the market to promote the use of standardised liability
data for the re/insurance industry.

OED v4.0.0 is the first major release which brings together the data standards for multiple
exposure classes — property, cyber, liability and marine cargo — into a single integrated
specification. It incorporates all fields from the original liability schema (v1), with some
field names updated for better alignment with property and the main schema.

## Rationale

This data standard is primarily intended to ensure a degree of consistency in policy-level data
capture and to enable efficient sharing of select data fields across the industry. Other than the
benefit of reduced frictional cost, wide-spread adoption of the schema should enable portfolio
managers to implement granular, accurate and robust exposure management procedures. This can, in
turn, enable sophisticated risk accumulation and/or liability modelling use cases.

The approach for the original schema was to make it as succinct and prescriptive as possible, to
ensure consistency of the data formats and to keep any ambiguity to a minimum.

The original taxonomy created for the liability data standard, below, is still intended to be
internationally applicable and implemented across UK, European and US markets. Increased market
adoption of this schema will heavily rely on it being used by the key players in the data
transfer process, specifically the brokers and reinsurers.

At a high level, the approach taken has aligned to the EIOPA definition of liability classes
(classes 10–13 in their non-life risk classification convention), with some subdivision of the
broad Other category. The benefit of linking the scope to the EIOPA definition is primarily to
ensure exhaustiveness.

*Motor Liability*, *Aviation Liability*, *Marine Liability* and *Personal Liability* are all
excluded from the data standard. This is partly motivated by concerns around the sharing of
personal information, but also the idea that liability exposure accumulation analysis often
starts at company or industry level. Accident & Health, which is not considered a liability class
under the EIOPA convention, could be omitted for similar reasons, with a possible fringe case for
inclusion being the Workers' Compensation class of business.

It is worth noting that in designing the taxonomy, it was decided to consider attributes of the
insured, such as industry/trade/profession, separately from class/coverage. For example, medical
practitioners, financial institutions, architects, engineers and lawyers can all be considered as
insured attributes to be captured for the *Professional Liability* coverage class. This should
lend itself to a more concise and consistent data schema.

## Taxonomy

Below is the proposed class-based taxonomy, for the purpose of identifying the insurance policy
coverages that should be in or out of scope of the first version of the standard.

```{image} images/ODS_Liability_Taxonomy_v1.png
:alt: ODS liability taxonomy, version 1
:width: 100%
```

```{note}
What is considered 'Other', EIOPA has termed 'general liability'. To avoid confusion, it is
intended to avoid this term as far as possible. In the US, general liability is better described
as either Commercial or Personal Liability, whereas in the UK it is referred to as either Public
or Employers Liability.
```

## Next steps

As interest and adoption increases, the likely next steps for this standard will be to develop
the schema to include more required data fields specific to each sub-class, through collaboration
and ongoing feedback. This work will also include expanding the scope of the taxonomy to those
classes currently not supported and driven by demand, such as motor and aviation.

Any feedback and suggestions for updates should be submitted via the
[issues here](https://github.com/OasisLMF/OpenDataStandards/issues), which will then be reviewed
by the Technical Working Group (TWG).