RMS, the Newark, Calif.-based catastrophe risk management firm, has released a suite of Europe inland flood hazard data products.
Describing the release as “the highest resolution view of the risk available on the market,” RMS said the data products include the RMS Europe Inland Flood High Resolution Maps, RMS Europe Inland Flood XML Accumulation Footprints, and RMS Europe Inland Peril Rating Databases.
By using consistent methodology across 13 European countries, insurers will be able “to properly understand the risk of a volatile, costly peril,” which will help increase insurance penetration, RMS said in a statement.
The geographic extent of the products is important because more than “a quarter of historical flood events in Europe affected more than one country at the same time,” RMS continued.
Data resolution also is important because inland flood varies considerably over small distances. RMS said its high-resolution maps provide detailed information on flood depth and extent, at a 5-meter (16 foot) resolution, which helps clients avoid over- or under-estimation of flood risk.
Claims for floods tend to be costlier than other perils, RMS noted. “[E]ven a limited number of flood claims over a small area could lead to greater losses than from a windstorm affecting a much larger region.”
The new RMS data suite takes into account the effects of temporary or permanent defenses, which can alter the views of flood risk. “This opens up underwriting opportunities in well-defended locations.”
“The consistency between data and probabilistic models makes the RMS Europe Inland Flood solution unique, and provides a suite of tools appositely designed for more informed flood risk management, from underwriting through to portfolio management,” said Adrian Mark, senior product manager, RMS.
“Flood insurance penetration is generally low, even in developed markets, because the risk is deemed too volatile and costly,” Mark added.
“Consequently, premiums can be very high and as a result, many individuals and companies do not purchase cover,” he said.
“The latest RMS data suite represents an opportunity for re/insurers to write a significant volume of new business in Europe, increasing the penetration of flood insurance and closing the protection gap that exists in the market, now that the right tools exist to understand the risk,” he went on to say.
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