New Opportunities for Writing Europe Inland Flood Risk as RMS Releases Highest Resolution Hazard Data on the Market
Consistent analysis across thirteen countries allows insurers to properly understand the risk of a volatile, costly peril
NEWARK, Calif. -
August 18, 2016 -
RMS, the world’s leading catastrophe risk management firm, has released a suite of Europe Inland Flood Hazard Data that offers the highest resolution view of the risk available on the market. The suite of data products includes the RMS Europe Inland Flood High Resolution Maps, RMS Europe Inland Flood XML Accumulation Footprints, and RMS Europe Inland Peril Rating Databases. The high-resolution maps provide detailed information on flood depth and extent at a 5m resolution using a methodology consistent across 13 European countries. This is significant because more than a quarter of historical flood events in Europe affected more than one country at the same time.
As inland flood varies considerably over small distances, the high-resolution insight allows clients to avoid significant over- or under-estimation of flood risk. Because claims for floods tend to be more costly than for other perils, even a limited number of flood claims over a small area could lead to greater losses than from a windstorm affecting a much larger region. Unique to flood risk is that, unlike other natural perils, it can be altered significantly by man-made defenses, whether temporary or permanent. The new RMS data suite takes this into account, giving defended and undefended views of flood risk with 70% of the data based on proprietary RMS research. This opens up underwriting opportunities in well-defended locations.
The Europe Inland Flood Hazard Data has been built using the new RMS pan-European Flood HD Models, including all sources of on- and off-floodplain risk across major and minor river networks. This ensures that the significant proportion of flood loss that stems from pluvial risk (i.e. small river flooding, flash floods, localized heavy rainfall), which can be as much as 30%-50% of the loss depending on the country, is represented in both the data and probabilistic models.
“The consistency between data and probabilistic models makes the RMS Europe Inland Flood solution unique, and provides a suite of tools appositely designed for more informed flood risk management, from underwriting through to portfolio management” said Adrian Mark, senior product manager, RMS. “Flood insurance penetration is generally low, even in developed markets, because the risk is deemed too volatile and costly. Consequently, premiums can be very high and as a result, many individuals and companies do not purchase cover. The latest RMS data suite represents an opportunity for (re)insurers to write a significant volume of new business in Europe, increasing the penetration of flood insurance and closing the protection gap that exists in the market, now that the right tools exist to understand the risk.”
RMS models and software help financial institutions and public agencies evaluate and manage catastrophe risks throughout the world, promoting resilient societies and a sustainable global economy.