Global risk management and reinsurance brokerage, Guy Carpenter, has announced the launch of its new Indonesia Flood Model (IFM).
The IFM will be able to provide its users with countrywide coverage and will enable insurers to assess their flood exposure. The data used is based on a 10,000-year stochastic catalogue simulating both riverine and rainfall flooding.
The riverine component of the hazard was developed using state-of-the-art hydrological and hydraulic modelling to simulate rainfall and river discharges across the river network in the country.
Meanwhile, the Rainfall flooding will be simulated by using an in-house methodology accounting for local climate conditions, soil type, land use, and topography.
The model will be able to produce event-loss tables and average annual losses at numerous levels of aggregation.
The technology will be powered by Oasis Loss Modelling Framework, a catastrophic modelling platform which was initially designed and build by the re/insurance industry. Outputs can be leveraged using Guy Carpenter’s MetaRisk platform to analyse reinsurance structures and for capital modelling.
Dr. David Maréchal, Lead Hydrologist at Guy Carpenter commented: “Indonesia suffers from very regular flooding, this is driven by natural causes such as high-intensity seasonal rainfall, and man-made influences such as increasing urban density in flood plains and deforestation. We expect to see increased impact from flooding over the near and medium term due to climate change influences.”
Rob Bentley, CEO of Global Strategic Advisory at Guy Carpenter, said: “The release of our Indonesia model follows the success of our Thailand, Malaysia and Philippines models. The new model covers the whole of Indonesia, replacing our previous Jakarta-only model, and includes the proposed area for the new capital city in East Kalimantan. Our new generation of models in Southeast Asia have combined event-sets, allowing us to study correlations within the region.”
Tony Gallagher, CEO for the Asia-Pacific Region at Guy Carpenter, added: “Flooding impacts thousands of people in Indonesia every year, yet the country faces a significant insurance gap which has severe implications for its economic resilience. Our industry is working to address climate change, with flood being particularly impacted in Indonesia and other countries in Asia. At Guy Carpenter, we are committed to working with our clients and partners on climate change to improve understanding and create tools such as our new flood model.”