Global risk modeller RMS has released new risk models for the Asia-Pacific region, including what is says are the most sophisticated typhoon models on the market for South Korea and Taiwan, and earthquake models for Singapore, Malaysia, Thailand and Vietnam.
The new earthquake models come as a RiskLink® version 17 update, expanding RMS’ previous offer of earthquake risk models for the Philippines and Indonesia to six Southeastern Asian countries.
RMS said the new models will allow clients to accurately compare correlation and diversification of risk across and between countries in the region and assess portfolio accumulations, reinsurance capacity, capital requirements and the risk to large accounts.
This will enable re/insurers operating in key Southeastern Asian markets to more accurately assess, price and underwrite risk, and thus strengthen their regional business.
Mohsen Rahnama, RMS Chief Risk Modeling Officer, commented; “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 typhoon models analyse both wind and flood risks explicitly, as well as rainfall-driven inland flooding and coastal storm surge – all at a high spatial resolution.
The models “robustly” reflect tail-risk from typhoon-driven flooding, helping re/insurers identify locations with potential to be the most profitable, and areas which would drive heavy losses.
RMS, said; “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.”
“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.
The models also enable a highly granular and detailed differentiation of building vulnerability, and includes unique insights from the local insurance market and historical losses.
Rahnama explained that although non-life premium growth in these territories has been strong, penetration levels are low, but the more robust understanding of the risk in the region provided through the risk models creates a significant opportunity for insurers and reinsurers to bridge the protection gap.
