PRESS RELEASE; 18 DECEMBER 2015
JBA Risk Management has released its high resolution, multi-peril flood model of the UK to assist the insurance industry place household risks with the new reinsurance facility, Flood Re. Publication of this probabilistic model is an essential stage in the process of creating affordable domestic flood cover for homes in high-risk areas.
Developed in collaboration with reinsurance broker Guy Carpenter, the JBA UK Flood Model is unique in that it includes river, rain and surface water (pluvial), and coastal flooding for the whole of Great Britain and Northern Ireland. Guy Carpenter is the reinsurance broker to Flood Re, which is scheduled to go live in the first half of 2016.
Jane Toothill, director at JBA Risk Management, explained: “The model allows insurers to better understand which risks should be ceded into Flood Re and reinsurers to quantify the risk associated with the Flood Re portfolio. The model will also be available to insurers and reinsurers who wish to fully quantify and understand their risk due to flooding in the UK. Although Flood Re will only be reinsuring domestic property, the model is comprehensive. It also includes commercial and industrial buildings.”
Vic Jenkins, managing director, head of technical innovation EMEA for Guy Carpenter, said “The completion of the JBA UK Flood model for the first time provides access to a truly holistic modelled view of flood risk from all perils and for the entirety of the UK. As insurers are refining their Flood Re cession strategies, this provides additional insight to aid understanding and provide more clarity to that ‘to cede or not to cede’ decision making process.”
JBA says it is crucial to explicitly model rain and surface water (pluvial) perils in addition to river and coastal flooding, due to their significant contribution to losses. For example, the torrential rainfall which overwhelmed drainage systems was responsible for a considerable proportion of the disastrous summer 2007 floods. They resulted in £3 billion in insurance claims across the country. Over the past five years since 2010, there have been more wet records than in any other decade. This includes the winter of 2013/14: the wettest on record.
Samples from the UK hazard maps
November 2015 was rainy, dull and warm with temperatures averaging 2 degrees higher than the 1981-2010 long-term average. Since the start of December, there have been floods and still more floods, with two Christmas shopping weekends rained off for many. A gauge at Honister Pass recorded 341.4mm of rainfall in the 24-hours up to 1800 GMT on 5 December 2015, making for a new UK record for any 24-hour period. A new 48-hour record was also set, when 405mm was recorded at Thirlmere in Cumbria in just 38 hrs, all according to Met Office figures.
Some technical detail
The development of the JBA UK flood model required both the creation of a multi-peril stochastic flood event set, and the incorporation of 5 metre resolution hazard mapping for all three perils. The event set contains hundreds of thousands of plausible flood scenarios grouped into years. Each event can be made up of elements of one, two or three perils.
Flood hazard maps created by JBA are already used by over 80% of the UK insurance market for underwriting purposes. The model, therefore, offers a unique opportunity to assess accumulated UK flood risk on a platform consistent with today’s underwriting practice.
Flooding is an extremely localised peril, with hazard intensities often varying considerably on very short spatial scales with underlying topography. For this reason, the model is based on 5 metre mapping and allows for highly detailed latitude/longitude level risk analysis. Spatial coverage includes Northern Ireland. JBA understands this is the first probabilistic flood model to include the province.
The model includes extensive, high quality, and up-to-date river flood defence data from the relevant government bodies for all regions.
Vulnerability functions for properties have been specified for each occupancy/structure type by peril, to capture the variation in flood damage due to water salinity and flood duration. The model also incorporates explicit representation of the time it would take to restore insured properties to their original value following flooding, to ensure that damage due to a second, closely following flood event is accurately represented.
The JBA UK Flood Model supersedes JBA's Great Britain River Flood model, which was released in 2013. It may be licensed in JBA’s catastrophe modelling platform, JCalf®, or as components to run in alternative catastrophe models. Alternatively access to the model is available via bespoke portfolio analysis run by JBA.
Schematic diagram of JBA’s UK Flood Model development and portfolio analysis process