A multi-peril flood catastrophe model for the insurance and reinsurance industry has been released by JBA Risk Management, to aid risk management in Vietnam, where insurance is one of the fastest growing sectors of the economy.
JBA Risk Management, a provider of natural hazard modelling services, created the Vietnam Flood Probabilistic Model as the first event set to aid risk analysis of both river flood and surface water perils for the insurance and reinsurance industry.
Jane Toothill, Director at JBA Risk Management, said the model allows insurers to “better understand which locations are most exposed to severe and frequent flooding.”
The model was developed using JBA’s Global Flood Event Set methodology, resulting in tens of thousands of tropical cyclone and non-tropical cyclone driven plausible flood scenarios.
The 2011 flooding in Thailand had a huge impact on local Thai and global industries as industrial parks and factories for multinational companies were severely affected across the country.
With the ground beginning to settle as the Asian insurance market recovers from the US$12 billion in losses, the industry is looking to better equip itself for the next large event in the region.
Toothill said the model, which caters for aggregated exposure portfolios and offers high resolution flood analysis, would be; “particularly useful for understanding flood correlations between areas of major exposure such as industrial parks and large cities.”
The multi-peril catastrophe model comes at a crucial time for insurance in Vietnam, when potential for massive industry loss is growing.
Since 2014 Vietnamese industrial zones have seen rapid growth – these booming developments are spreading out onto historic flood plains, making them increasingly vulnerable to extreme flood losses, underlining the need for adequate modelling capabilities and risk transfer solutions.
