RMS sits at the intersection of technology, science and domain experience, giving us a unique perspective on what’s going on in the world of tech, modeling and computing. “In Case You Missed It” is our roundup of the latest developments from Silicon Valley to Bangalore that EXPOSURE doesn’t want its readers to miss. In this edition, Hemant Nagpal, director of model product management at RMS, picks his top three headlines from across Asia-Pacific.

01. Building Resilience

Southeast Asia is vulnerable to a range of natural catastrophes, including earthquakes, tsunamis, typhoons and flooding. Floods alone result in billions of dollars in damage each year; in 2015, floods in Myanmar displaced 1.6 million people and caused an estimated US$1.5 billion in losses and damages.

In 2019, the Southeast Asia Disaster Risk Insurance Facility (SEADRIF) program will launch — a regional catastrophe risk pool designed to provide participating countries in Southeast Asia with immediate rapid response financing after natural disasters. It will have an initial focus on Cambodia, Lao PDR and Myanmar.

Domiciled in Singapore, SEADRIF will make full use of the insurance ecosystem in the region, providing cost-efficient reinsurance capacity, structuring and modeling support for the pool. The World Bank is to provide financial and technical assistance with continued financial and political support from Japan. The Philippines are interested in joining SEADRIF as it looks to expand to other countries in the region.

At the national level, the program will help develop a national disaster risk finance strategy; at the regional level, the program supports the preparation
and implementation of the proposed regional catastrophe risk pool. Reducing reliance on disruptive national budget reallocations or uncertain humanitarian assistance will ultimately help to narrow the natural catastrophe protection gap in Southeast Asia.

02. PMFBY Growing Pains

The growth in India’s crop insurance market premium has been remarkable. The Pradhan Mantri Fasal Bima Yojana (PMFBY) government-backed agricultural insurance scheme launched in 2016 covers 47.9 million farmers and is now being implemented in 25 states. In 2015-16, premiums reached Rs 4,200 crore (US$612 million); it is up sixfold to Rs 24,352 crore (US$3.54 billion) in the last year. Loss ratios are predicted to hit 90 percent for the 2017-18 season, and GIC Re projects 10 percent premium growth for 2018-19. GIC Re leads 15 of 18 treaties in the domestic crop insurance market with a market share of 52 percent; five public sector insurers and 13 private insurance companies participate in the scheme.

Under the scheme, the farmers’ premium after subsidies has been kept low — between 1.5 to 2 percent of sums insured for food grains and oilseed crops, and up to 5 percent for horticultural and cotton crops. With the rapid growth of PMFBY, issues have arisen such as claims delays, and a two-year consultant contract has been awarded to the United Nations Development Programme (UNDP) to help overcome these problems.

03. Version 18 and Asia-Pacific

RMS has made its own news in Asia-Pacific as Version 18 (V18) launched on July 16 with a slew of new and updated models to provide the latest modeling insights to drive growth across the region’s varied markets. The expanded Asia-Pacific model suite includes new peril models for India flood, Philippines typhoon and inland flood and South Korea earthquake. This is in addition to the recently launched RMS® Japan Earthquake and Tsunami High Definition (HD) Model.

The first fully probabilistic flood model for the Indian insurance market covers the whole of India and includes pluvial and fluvial flooding, tackling a major loss driver for the country. A new Philippines model provides a comprehensive solution to model climate hazard for wind and storm surge, including an inland flood model that considers tropical cyclone and non-cyclonic rain.

And expanding this regional focus, V18 also includes important updates to the Australia Earthquake and Australia Cyclone Models, as well as to the India Earthquake Model.