NEWARK, Calif. - July 10, 2017 RMS, a global risk modeling and analytics firm, today announced a substantial expansion of its suite of modeling solutions for the Asia-Pacific region. New models include the RMS® South Korea Typhoon Model and the RMS® Taiwan Typhoon Model, adding to the existing typhoon models in the region, for Japan and China. For analyzing seismic risk, the Version 17 update includes four new models: the RMS® Vietnam Earthquake Model, the RMS® Singapore Earthquake Model, the RMS® Malaysia Earthquake Model and the RMS® Thailand Earthquake Model, which sit alongside earthquake risk models for seven other major economies in the region.
Mohsen Rahnama, RMS chief risk modeling officer, said “the scope of new models our teams are bringing to the Asia-Pacific market is unprecedented, and RMS is now able to offer typhoon and earthquake risk analysis across multiple countries in the region, enabling clients to grow and diversify their portfolios with confidence, using the market-leading science and analytics for which RMS is known.”
The most sophisticated typhoon models for South Korea and Taiwan on the market
The new RMS South Korea and Taiwan Typhoon Models give clients the analytics needed for improved risk selection and pricing, offering a comprehensive view of risk using the latest science to represent the full spectrum of severe storms that could bypass or make landfall. In addition to wind, typhoon flood risk is explicitly modeled by RMS in these territories – as it now is in Japan – including rainfall-driven inland flooding as well as coastal storm surge – all modeled at a high spatial resolution. The new RMS models help clients to identify the most profitable locations for writing new business, and to determine which areas are driving losses, with the tail risk from typhoon-driven flooding reflected in the models robustly. This ensures clients can analyze the vast majority of potential losses at longer return periods, and so calculate their capital requirements and reinsurance needs more confidently.
The models also allow for a highly granular differentiation of building vulnerability, reflecting different heights and construction types, with unique insights on the local insurance market and historical losses based on extensive RMS collaboration with local insurers on the ground.
“We have used all our experience and expertise from tropical cyclone modeling across the globe to develop these new models for South Korea and Taiwan,” said Rahnama. “Although non-life premium growth in these territories has been strong, penetration remains low and this is a significant opportunity for insurers and reinsurers to bridge this protection gap, if they have the most robust understanding of the risk. RMS is now providing that.”
RMS’ typhoon modeling for the western North Pacific also includes China & Hong Kong, Japan and Guam, in addition to Taiwan and South Korea.
State-of-the-art view of seismic hazard across Southeast Asia to differentiate risk precisely
RMS’ heavy investment in modeling solutions for Asia-Pacific also includes four new earthquake models for Southeast Asia: in Singapore, Malaysia, Thailand and Vietnam – which join existing models for the Philippines and Indonesia, meaning that RMS now models earthquake risk across six countries in Southeast Asia. These will enable clients to accurately assess portfolio accumulations, reinsurance capacity, capital requirements, and the risk to large accounts, because the correlation and diversification of risk across and between countries can now be viewed consistently throughout this fast-growing region. This capability will help firms achieve strategic growth objectives.
There are large variations in earthquake risk in Southeast Asia, a region which is developing and urbanizing rapidly. The new and updated models will allow clients writing business there to price with greater confidence by capturing the differences in seismic risk, building types and exposure concentrations. The RMS Southeast Asia Earthquake Models include an assessment of building characteristics, such as height, and the type of soil on which they are constructed, and incorporate over 1,000 country-specific vulnerability functions to differentiate their impact on potential losses.
Rahnama added: “With Southeast Asia among the fastest developing regions in the world, there is a huge opportunity for our clients to underwrite this increasing exposure if they can accurately represent potential future losses from individual risks to treaty reinsurance. These new earthquake models will help them to do this. They can use the same view of risk for portfolio and accumulation management, so safely expanding their business. Together with our other regional earthquake models for Taiwan, China, Japan, New Zealand and Australia, our clients now have the deepest insights into seismic risk across the Asia-Pacific region.”
The release of new typhoon and earthquake models for the Asia-Pacific region further demonstrates RMS’ strategic focus on helping clients close the coverage gap and take advantage of the region’s growth. It follows on from the addition in March 2017 of agricultural risk models for India and China to its growing line of emerging risks models. Furthermore, RMS is currently developing a flood model for India which will help (re)insurers manage high losses caused by both river and pluvial flooding from intense rainfall which, as Mumbai showed in 2005 and Chennai in 2015, is a major problem in principal cities. This is due to recent urban growth, which exacerbates flood risk, and higher levels of insurance penetration. This fully probabilistic flood model for India is due for release next year.