The Importance of Understanding Flood Exposure in a Hard Reinsurance Market

The hard reinsurance market - where there is less reinsurance available and the costs for reinsurance remain high - is expected to continue into 2024. For primary insurers, high inflation is having a ‘profound effect on loss expectancy in many operating segments’ with natural disasters and the effects of climate change adding further complexity to understanding risk (Munich Re, 2022). This is combined with reinsurance providers raising pricing and reducing their risk appetite. Reinsurance rates have been increasing significantly with Howden Tiger reporting that property catastrophe rates have increased 50% cumulatively over the last 2 years (Howden Tiger, 2023). 

The hardening of the reinsurance market has led to a marked increase in retention by cedants in the last 5 years. This trend is expected to continue with recent reports from Moody’s Reinsurance buyers survey indicating that an increasing number of insurers are expecting to buy less reinsurance protection next year (Reinsurance News, 2023).

This hard reinsurance market is also compounded by a trend of increasing natural catastrophe losses since 2017 (see Figure 1), with the first half of 2023 also seeing above average losses (Gallagher Re, 2023). In 2022, £181 billion was attributed to insured losses from natural disasters (Aon, 2023) with approximately 54% of natural catastrophe losses in the period from 2001-2022 being retained by the cedant (Howden Tiger, 2023). Climate and environmental risks are expected to be a core focus over the next decade (World Economic Forum, 2023). With cedants expected to buy less reinsurance protection, the amount of NAT CAT losses retained by primary insurers could rise over the next couple of years.

Figure 1: Total natural catastrophe insured losses split by peril. Dotted line shows six-year average 2017-2022. Source: Howden Tiger (2023).

As well as NATCAT losses in general increasing, a recent report from Howden’s highlights that not only have NATCAT insured losses been increasing, even with adjustments to inflation, but perils previously considered as ‘non-peak’ such as flood have been driving these increases (Howden Tiger, 2023). Gallagher Re report that 8% of NATCAT insured losses this year so far have been attributed to flooding (Gallagher Re, 2023) with many insurers adjusting their book of business to reflect the change in these risks (Guy Carpenter, 2023).

Indeed, in the last couple of years there have been many notably large flood events, with the 2021 Summer Floods in Europe estimated to have insured losses at more than $12 billion according to AXA (2022) making it the costliest natural catastrophe event in 2021, whilst large floods impacted South Africa in 2022. This year has already seen several substantial floods, including large flood events impacting the US and the Emilia-Romagna floods impacting Italy causing at least $2.3 billion in insured losses according to Gallagher Re (2023).

Figure 2: Sample Flood Map: JBA Flood Risk Management. © Mapbox © OpenStreetMap Improve this map. 

With this increase in flood related insured losses and a move to higher primary retention, it is crucial that insurers understand their flood exposure. Flood, unlike perils such as earthquake and windstorm, is highly localised, whereby one property may experience a loss, whilst a property further down the same street may not. JBA Risk Management offer a range of flood related products, for every property globally, offering high resolution flood data that help organisations such as re/insurers understand and mitigate their risk as well as manage their exposure.

How can JBA help?

JBA have over 15 years’ experience of providing flood risk data to the re/insurance industry, the banking and financial sectors, and NGOs. Offering high resolution data for any location in the world JBA’s range of products is designed to help risk managers understand and mitigate risk. Alongside physical flood hazard maps and catastrophe flood models, JBA provides current day and future flood data where ever you need it. 

JBA flood data products include:

  • A dataset to help insurers identify the most flood prone properties and is especially useful for underwriters.
  • A dataset that enables insurers to understand the average annual loss to each property when working on risk pricing.
  • A range of data to help insurers understand their exposure hotspots including catastrophe models and Hazard Accumulation Zone (HAZ) datasets for overarching exposure management.



Aon, 2023. Weather, Climate and Catastrophe Insight. Available at: 2023 Weather, Climate and Catastrophe Insight | Aon [Accessed: 12.10.2023].

AXA, 2022. The 2021 Floods in Europe: One Year Later. Available at: [Accessed: 12.10.2023].

Gallagher Re, 2023. H1 2023 Natural Catastrophe Report Preliminary Overview. Available at: natural-catastrophe-report-2023-h1.pdf ( [Accessed: 12.10.2023].

Guy Carpenter, 2023. Guy Carpenter’s Vicky Carter Discusses Market Conditions. Available at: Guy Carpenter’s Vicky Carter discusses market conditions [Accessed: 12.10.2023].

Howden Tiger, 2023. Today’s Natural Catastrophe Portfolio: A Balancing Act. Available at: 8647-Nat-Cat-Loss-Final.pdf ( [Accessed: 12.10.2023].

Munich Re, 2022. Extreme inflation and natural disasters call for disciplined risk management. Available at: [Accessed: 12.10.2023]. [Accessed: 12.10.2023].

Reinsurance News, 2023. Reinsurance price rises likely to continue in 2024: Moody’s. Available at: [Accessed: 12.10.2023].

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