Natural hazard modelling services provider, JBA Risk Management, has opened its first U.S. office in response to demand for what it’s called a gap in the insurance and reinsurance sectors’ knowledge of sophisticated U.S. flood risk assessment.
Despite floods consistently falling amongst the highest ranking causes of insured losses globally, and being the most prevalent peril in the U.S, JBA has said the insurance market has lacked access to fully up-to-date and high-quality information to accurately assess this risk.
“The U.S. catastrophe risk market has understandably been focused on hurricane and earthquake which are relatively less complex to model than flood.
“However, with the private flood insurance market opening up, there are gaps in most datasets which can lead to costly mistakes for underwriters looking to assess their risk,” Matt Reid, Managing Director, JBA Risk Management USA, said in a speech which marked the launch of the firm’s expansion in the US.
The risk modelling service firm was the first to pioneer the use of gaming technology to run 2D hydraulic modelling software, and with the opening of its California-based office, it now offers what its says are the first flood maps to separately model surface water flood and river flood – an important distinction for effective underwriting.
“Unlike most available datasets, its models provide information on all U.S. rivers regardless of size, include flood defence data, and are upgraded annually,” JBA explained.
USA Managing Director, Reid, continued; “Unlike other catastrophe modellers, we are completely focused on flood risk which will be invaluable to US insurers wanting to expand their flood coverage.”
2016 was the fourth consecutive year where flooding was the costliest global peril – at $62 billion it caused nearly one-third of the $210 billion global economic losses.
And with last year being the warmest year on record and meteorologists predicting more intense weather events in future years as the potential impacts of climate change takes hold, flooding is expected to continue to fall amongst the costliest perils, making the market ripe and ready for more sophisticated understanding of this top global risk.