MIAMI, Oct. 27, 2015 /PRNewswire/ -- Impact Forecasting, Aon Benfield's catastrophe model development team, has enhanced its United States riverine flood model to more precisely quantify flood risk at a much higher resolution. This enables insurers to better understand the peril and apply insights to underwriting decisions and reinsurance purchases through improved data and the latest scientific research. Aon Benfield is the global reinsurance intermediary and capital advisor of Aon plc (NYSE:AON) and is launching the enhanced model at 2015 PCI Annual Meeting in Hollywood, Florida.
Inland flooding has accounted for about two-thirds of all disaster declarations in the past 50 years with economic costs reaching a high of USD34bn* in 1993. Recently in 2015, floods impacting Texas, Oklahoma and South Carolina have caused billions of dollars of new damage and loss and reinforced the need for advanced inland flood risk models.
While detailed flood maps are available in the U.S. to identify floodplains and locate properties at risk, they do not provide loss estimates across a portfolio of properties. Impact Forecasting's model can be used by underwriters and risk managers to support inland flood rate making, pricing and risk transfer in addition to determining site elevations and flood inundation depths for all their insured locations.
Key enhancements to the U.S. flood model include:
In addition, the model includes scenarios for the 2015 floods affecting Texas, Oklahoma and South Carolina, the Colorado Frontal Range Flood of 2013, the Lower Mississippi Flood of 2011, the California Central Valley Flood of 1997 and the Midwest Flood of 2008.
Narathip Sutchiewcharn, senior scientist at Impact Forecasting, commented: "With only 35% of eligible properties within FEMA designated flood plains having flood insurance, the new model opens doors for insurers to better understand their risk and strategically write new business. Our updated model incorporates improved spatial resolution, detailed river network data and extensive validation to deliver more precise flood risk quantification."
Kelly Smith, President of Aon Benfield U.S., added: "The enhanced U.S. flood model plays a critical role as we help insurers and homeowners alike to quantify the risk of flood and prepare for its damaging consequences. The model adds value to our clients by enabling them to set the most appropriate premiums, purchase effective reinsurance and notably gives them the confidence to underwrite more business, supporting homeowners across the U.S. to protect their properties against this hazard."
Notes to editors
* Inflation-adjusted to 2015 USD based on U.S. Consumer Price Index
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