Model selection for US flood modelling

There has been $33 million of economic flood losses in the US since 2006, but less than 20% of this ($6.5 million) has been covered by insurance, with the US National Flood Insurance Program (NFIP) covering  much of the difference.

 

 

Changes in legislation in 2015 will open up significantly more opportunities for US insurers to write flood insurance in the US, opening up new revenue opportunities for reinsurers. In anticipation of the changes, a number of catastrophe modelling companies have been developing flood models and flood data for insurers.

A Lloyd’s syndicate wanted to identify the available data and flood models, with comparisons of the suitability and cost benefit of the different products. They approached Abernite to provide an assessment of the products available today, and those coming in the future from the main vendors, and the emerging boutique modelling companies.

The research established key criteria for assessing the quality of the flood products, and identified a number of companies that the syndicate exposure manager had not previously been aware of. This enabled her to develop a short list of companies to talk to directly that met her critical needs, saving time and ensuring an objective assessment of the choices available