In the first blog of this series, Catastrophe models: What should we fix?, Stephen Hutchings discussed the challenges catastrophe modellers face today. Here, we explore how a shift in the modelling mindset has enabled our global offering, which provides the solution to overcome those challenges.
Current gaps in flood model coverage, especially in high-risk regions, have meant insured flood losses remain high. In addition, we estimate that a quarter of the world’s population is now at risk to inland flood, resulting in high exposure worldwide for re/insurers underwriting the risk.
Modelling flood consistently on a global scale has long been impeded by traditional methods of model development, which would be inefficient at addressing this worldwide problem. Growing global portfolios and increasing insurance penetration mean that a consistent, efficient and cost-effective approach to managing flood is needed to mitigate the risk to portfolio profitability.
A significant shift in the mindset of both model vendors and users is needed to move towards a modelling approach that prioritises globally consistent, quality model coverage, and places users at the centre of the risk management process.
Thanks to our ground-breaking new Global Flood Model, this is now possible.
Historically, flood models have been unable to offer global probabilistic quantification of loss, in part due to the size and scale of the data and loss calculations involved. The introduction of our Global Flood Model, the first of its kind in the market, means you can consistently generate probabilistic modelled loss results anywhere globally, without compromising on data quality or run times.
By combining JBA’s market-leading 30m Global Flood Map and Global Flood Event Set together with JBA's new modelling technology, a sophisticated system that puts control in the hands of the user (which we will explore in future blogs), the Global Flood Model allows fully automated, on-the-fly model building for exposed locations. We aim to fill in the model gaps in the market and provide a consistent alternative to those countries for which models already exist.
The pre-built parameters of legacy models have reduced the flexibility available to users and hindered the development of high-resolution global flood models. We believe that re/insurers should be empowered to tailor a model to their needs and leverage their proprietary knowledge and data to accurately reflect their view of risk globally.
We have built the Global Flood Model to be user-centric with transparency and flexibility as key principles. Users now have the option to customise the Global Flood Model’s assumptions, datasets and model parameters extensively to meet their individual needs and views of risk. The ability to investigate every aspect of the model allows users to undertake rigorous and comprehensive sensitivity testing.
Integration of models into existing workflows has always been a barrier to uptake of alternative models in the industry and, as a result, improved accessibility is increasingly critical. The Global Flood Model is platform agnostic: we work in partnership with Oasis Loss Modelling Framework and hosted services such as Nasdaq Risk Modelling, as well as directly with our clients to install in-house. This ensures users can access the Global Flood Model whichever way best suits their needs, in a cost-effective manner.
Look out for our next blog in the series, where we’ll explore what the Global Flood Model is in more-depth and how it can help you.
For more information on our Global Flood Model, Global Flood Maps or Global Flood Event Set, please get in touch.
