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Insurance Solutions

Formerly Moody’s RMS

This article by Jeff Waters, meteorologist and product manager at RMS, first appeared in Carrier Management.

As the journey towards a private flood insurance market progresses, (re)insurers can learn a lot from the recent U.S. flood events to help develop profitable flood risk management strategies.

Flood is the most pervasive and frequent peril in the U.S. Yet, despite having the world’s highest non-life premium volume and one of the highest insurance penetration rates, a significant protection gap still exists in the U.S. for this peril.

It is well-known that U.S. flood risk is primarily driven by tropical cyclone-related events, with storm surge being the main cause. In the last decade alone, flooding from tropical cyclones have caused more than $40 billion (2015 USD) in insured losses and contributed to today’s massive $23 billion National Flood Insurance Program (NFIP) deficit: 13 out of the top 15 flood events, determined by total NFIP payouts, were related to storm surge-driven coastal flooding from tropical cyclones.

Inland flooding, however, should not be overlooked. It too can contribute to a material portion of overall U.S. flood risk, as seen recently in the Southern Gulf, South Carolina, and in West Virginia, two areas impacted by major loss-causing events. These catastrophes caused billions in economic and insured losses while demonstrating the widespread impact caused by precipitation-driven fluvial (riverine) or pluvial (surface water) flooding. It is these types of flooding events that should be accounted for and well understood by (re)insurers looking to enter the private flood insurance market.

It hasn’t just rained; it has poured

In the past 15 months the U.S. has suffered several record-breaking or significant rainfall-induced inland flood events ….

To read the article in full, please click here.

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Jeff Waters
Jeff Waters
Director, Model Product Management, Moody's

Jeff Waters joined Moody's RMS in 2011 and is based in Bethlehem, PA. As part of the Product Management team, he is responsible for product management of the Moody's RMS North Atlantic Hurricane Models. 

Jeff provides technical expertise and support regarding catastrophe model solutions and their applications throughout the (re)insurance industry. He also generates product requirements for future updates and releases, and helps develop the overall product strategy, messaging, thought leadership, and collateral to ensure its commercial and technical success. 

Waters’ background is meteorology and atmospheric science with a focus in tropical meteorology and climatology. Jeff holds a B.S. in Geography/Meteorology from Ohio University (’09), and a M.S. in Meteorology from Penn State University (’11). He is a member of the American Meteorological Society, the International Society of Catastrophe Managers, and the U.S. Reinsurance Under 40s Group, Inc
 

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