PRESS RELEASE: 29 JUNE 2016
Floods don't adhere to country borders, as highlighted by major international events in Europe which resulted in heavy economic and insured losses. This model, released in June 2016, was developed in response to this need for consistent international, European flood loss calculations.
Many European rivers cross country borders, for example the Oder and Danube, and some form international boundaries, such as the Elbe and Rhine. Flood losses along the Rhine in Germany are likely to be caused by the same hydrological event as losses along the Rhine in France or Switzerland, so should be considered together to avoid missing key per-event accumulations.
Over 254,000km of river network have been modelled across 12 European countries to produce high resolution flood hazard maps, which are widely used for underwriting purposes. However, in order to quantify the exposure of a portfolio to catastrophic flood losses, it is necessary to understand the spatial and temporal correlations between flood events by using a catastrophe model.
Analysis by JBA shows that in the European event set, 46% of stochastic events affect more than one country, mirroring historical international flood events. For example, in 2002 flood damage was incurred in Austria, Czech Republic, Germany, Hungary, Italy and Slovakia, totalling €20bn in economic losses (in 2014 Euros).
This model enables consistent portfolio optimisation, quantification of solvency requirements and improved reinsurance pricing across Europe. The JBA Europe river flood probabilistic model includes Austria, Belgium, Czech Republic, France, Germany, Hungary, Liechtenstein, Luxembourg, Poland, Slovakia, Slovenia and Switzerland.
Please get in touch for details on portfolio analysis services or model licensing.
Authors: Naomi Booth and Jess Boyd