Willis Re Launches Flood Model for MENA Region

Willis Re has launched a brand new flood mannequin for the Center East and North Africa (MENA) area, which allows re/insurers to quantify their flood threat utilizing a disaster mannequin.

At the moment the mannequin covers Morocco, the United Arab Emirates, and the Kingdom of Saudi Arabia, with additional releases for Oman, Qatar and Egypt in the course of the third and fourth quarter of 2021.

This mannequin was developed by way of the collaboration of Willis Re’s in-house peril specialists with main flood specialists, KatRisk, and assets from the Willis Analysis Community (WRN).

The newest flood hazard layers and loss aggregation methodologies are used to generate location stage losses in addition to portfolio outputs for a 50,000-year simulation interval.

The principle enterprise purposes of the MENA flood cat mannequin embrace:

  • Structuring and pricing reinsurance layers for buying appropriate safety
  • Assessing capital adequacy and responding to regulatory solvency necessities
  • Portfolio administration and optimisation
  • Responding to score company requests

Floods are comparatively frequent within the MENA area, stated Willis Re, noting that harm from floods can come from pluvial and fluvial flooding (flooding from rainfall or rivers).

Fluvial flooding is extra predictable because of proximity to river networks, whereas pluvial flooding is extra unpredictable as a result of arid desert surroundings, which, after intense rainfall, could trigger runoff and flash floods, significantly in city areas the place the soil is roofed by impermeable man-made surfaces.

This mixed with Wadis (dry riverbeds) channels water after intense precipitation and causes unpredictable and localised flooding. These flood occasions have the aptitude to trigger necessary financial and insured losses.

Such floods are prone to affect the decrease return durations of the exceedance chance curve, due to this fact impacting re/insurers profitability and making it increasingly very important for re/insurers to mitigate this revenue volatility by modeling the chance.

“We’re extraordinarily happy to announce the addition of the MENA flood mannequin to our toolkit. Continued dedication to our purchasers and the area requires us to boost our capabilities referring to the extra tangible and ceaselessly noticed perils,” commented Natalie van de Coolwijk, chief government officer, Center East and Africa.

“These capabilities will solely develop into extra related because the panorama evolves and the consequences of local weather change develop into extra obvious,” van de Coolwijk added.

“Constructing a extra sturdy view of threat for perils comparable to flood means we will tailor fit-for-future reinsurance programmes for our purchasers and extra scientifically quantify affect on claims and reinsurance prices,” she stated. “Having the ability to give purchasers extra consolation and certainty round reinsurance cowl and prices is on the core of our function, in the end contributing in direction of a greater protected and extra resilient insurance coverage business.”

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