JBA Risk Management selected by Guy Carpenter to model Flood Re risk

Model to use unprecedented detail to capture UK multi-peril flood risk



Flood modelling specialist JBA Risk Management has been commissioned by Flood Re broker Guy Carpenter to develop a cutting edge probabilistic loss model for flooding in the UK.

The multi-peril flood model will use the latest technology to simulate flood risk at an unprecedented level of detail and will be the first model to combine river flood, coastal surge and surface water flood for the entire country, including Northern Ireland.  

The model, likely to be completed later this year, will be used to draw a more complete and sophisticated picture of the risk being underwritten by Flood Re, the flood reinsurance fund being created to provide affordable domestic flood cover in high-risk areas. The scheme, which appointed Guy Carpenter as broker earlier this year, is due to go live in the first half of 2016.

Jane Toothill, director at JBA Risk Management, commented: “Reinsurers are preparing themselves to be best informed about the risk associated with the Flood Re placement at the same time as insurers are keen to better understand which risks should be ceded into Flood Re.  This requires top quality and extremely high-resolution data given the complexities of underwriting high-risk areas. We’re delighted to be working with Guy Carpenter to make sure the industry is as best prepared as possible.”

Flood risk typically demands more detailed data sets because the same event can have vastly different impacts on properties in close proximity compared to other natural perils where the damage is usually more uniform. 

Toothill added that using JBA’s flood data will bring continuity to the Flood Re scheme. “Much of the UK insurance market already uses our data for underwriting. Use of the same underlying flood hazard data in the probabilistic model will bring important consistency between underwriting practice and calculation of portfolio-level risk.”

The collaboration between JBA Risk Management and Guy Carpenter will last for an initial three years with JBA making annual upgrades to the model as Flood Re matures.

Vic Jenkins, head of technical innovation for Guy Carpenter’s EMEA region, commented: “It is vital that the full scale, geographic scope and complexity of the risk being underwritten is understood by both Flood Re and the insurers who will be ceding to it. This new model is a huge step forwards in this respect. We look forward to working with JBA in the scoping and deployment of this state-of-the-art flood model and helping our clients take their understanding of UK flood risk to a whole new level.”



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