RMS, the Newark, Calif.-based risk modeling and analytics firm, has introduced typhoon models for wind and flood for South Korea and Taiwan, plus four new earthquake models for Singapore, Malaysia, Thailand and Vietnam.
This launch augments the company’s existing suite of typhoon models for Japan and China as well as its earthquake risk models for seven other economies in the Asia-Pacific region: Australia, China, Indonesia, Japan, New Zealand, the Philippines and Taiwan.
The new RMS South Korea Typhoon Model and the RMS Taiwan Typhoon Model provide a comprehensive view of risk — covering wind, typhoon flood risk, rainfall-driven inland flooding and coastal storm surge, which gives “clients the analytics needed for improved risk selection and pricing,” said RMS in a statement.
“The new RMS models help clients to identify the most profitable locations for writing new business, and to determine which areas are driving losses, with the tail risk from typhoon-driven flooding reflected in the models robustly,” the modeling firm added.
“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,” said RMS.
The models allow for a highly granular differentiation of building vulnerability, reflecting different heights and construction types. In addition, they provide insights on the local insurance market and historical losses based on RMS’ collaboration with local insurers, the company noted.
“Although non-life premium growth in these territories has been strong, penetration remains low and this is a significant opportunity for insurers and reinsurers to bridge this protection gap, if they have the most robust understanding of the risk,” said Mohsen Rahnama, RMS chief risk modeling officer. “RMS is now providing that.”
RMS’ typhoon modeling for the western North Pacific also includes China & Hong Kong, Japan and Guam, in addition to Taiwan and South Korea.
4 Earthquake Models
RMS’ four new earthquake models for Southeast Asia – Singapore, Malaysia, Thailand and Vietnam – join its existing regional models for the Philippines and Indonesia.
These models enable clients “to accurately assess portfolio accumulations, reinsurance capacity, capital requirements, and the risk to large accounts, because the correlation and diversification of risk across and between countries can now be viewed consistently throughout this fast-growing region,” said RMS.
RMS noted that there are large variations in earthquake risk in Southeast Asia. “The new and updated models will allow clients writing business there to price with greater confidence by capturing the differences in seismic risk, building types and exposure concentrations,” RMS explained.
The RMS Southeast Asia Earthquake Models include an assessment of building characteristics, such as height and the type of soil on which they are constructed. They also incorporate over 1,000 country-specific vulnerability functions to differentiate their impact on potential losses.
There is a huge opportunity for clients to underwrite “this increasing exposure if they can accurately represent potential future losses from individual risks to treat reinsurance,” Rahnama added. “They can use the same view of risk for portfolio and accumulation management, so safely expanding their business.”
RMS said the release of new typhoon and earthquake models for the Asia-Pacific region adds to the company’s growing line of emerging risks models, which include the March launch of its agricultural risk models for India and China.
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