Aon Benfield has launched a flood model for Thailand following the country’s unprecedented flood insurance losses of 2011.
According to the reinsurance intermediary, last year’s losses, which are thought to be in excess of $15 billion, were due to a rapidly changing land-use pattern, record rainfall in the northern region and seasonal high tides in the Gulf of Thailand, in addition to man-made factors in managing the floods.
In response, the firm has produced a fully probabilistic Thailand flood catastrophe model with key features including:
Improved understanding of the key drivers of flood risk in Thailand.
Ability to make more informed decisions on reinsurance purchase and pricing.
Identification of the amount of capital needed to satisfy regulatory and rating agency requirements.
Modelling for residential, commercial and industrial lines of business.
Damage functions based on 2011 claims data and international experience.
Aon Benfield’s head of impact forecasting, Asia Pacific, Adityam Krovvidi, comments: “The record flood insurance loss in Thailand provides a learning opportunity to further investigate the potential impact of this hazard.
“This in turn has enabled us to create a solution that lies in a rigorous analytical and scientific approach, while taking into account the location of exposures and flood defences.”