A growing understanding of the threat of flood and the need for insurers to better cover this risk has led JBA Risk Management, a specialist in mapping and understanding flood risk globally, to launch a new office in Singapore. Two of the company’s directors explain why to Intelligent Insurer.
JBA Risk Management, a UK-based provider of natural hazard modelling services, launched a new office in Singapore in September. The company sees great growth potential in the Asia-Pacific region and believes its modelling tools can help insurers grow in the region and also start to increase insurance penetration in many countries.
The Singapore office is headed by Iain Willis, Asia-Pacific managing director at JBA Risk Management. He will look to build relationships with international insurers targeting growth in the region and domestic players keen to get a better handle on their catastrophe risks, especially flood risk, which JBA specialises in.
"WE NOW HAVE DATA-COVERED FLOOD SCENARIOS IN ALMOST EVERY PART OF THE WORLD AND IT BECAME NATURAL TO CONSIDER OUR OWN EXPANSION." SIMON WALLER, JBA RISK MANAGEMENT
“I will initially be looking at regionally focused flood solutions and scenarios, providing flood maps and consultancy support, plus more general business development. But we are in no rush. We understand that we need to get to know the region and build relationships and that opportunities will present themselves.
“Some very interesting conversations are already happening simply by virtue of having an office here,” Willis says.
JBA has mapped flood throughout most of the world. Currently in the Asia-Pacific region, it has developed 30-metre resolution fluvial and pluvial maps for every country. For insurers using a geographic information system, JBA’s maps assist with underwriting decisions. Its dataset also comprises polygons showing the areas on the floodplain that benefit from river flood defences.
JBA Risk Management was formed six years ago as a division of the JBA Group, an engineering and consultancy company, formed around 20 years ago. Within five years, some 80 percent of UK insurers were using its flood data.
“We then considered the global nature of insurance and starting expanding our model globally. We now have data-covered flood scenarios in almost every part of the world and it became natural to consider our own expansion,” says Simon Waller, managing director, JBA Risk Management, based in the UK.
Waller says this could be the start of a wider expansion for the business. The JBA Group already has a footprint in parts of Asia-Pacific with offices in Australia and Cambodia and a focus in this part of the world seemed a natural starting place, Waller says.
Challenges and opportunities
Willis states that it is impossible to generalise about the potential in the Asia-Pacific market. Each country presents its own unique challenges and opportunities and insurers in each region differ in terms of their level of sophistication in the way they assess and underwrite flood risk. Australia, for example, is very sophisticated but in contrast, insurers in places such as Thailand or Malaysia still deal in regional aggregates.
There is a real appetite for better data, he says, especially in markets that have suffered heavy flood losses in recent years. While some insurers see better data as a way of better understanding their exposure and limiting their liability, others will see it as offering an opportunity to expand into new markets with a better handle on the risks.
JBA works alongside the bigger risk modelling companies and often uses their modelling platforms in conjunction with its own data. “As a small company, our culture has always been to collaborate,” Waller says.
The way insurers are using JBA’s data is also changing, he says. Increasingly, they are using it to assess their capital management and reinsurance needs as well as their direct exposure to the risk and as a tool for pricing that. But both the education process and the way its flood models are used differ between domestic insurers in Asia and international players.
“We already work with a lot of international companies and they certainly see using this data in Asia as an expansion opportunity,” he says. “In contrast, domestic players are often striving to get better at assessing flood risk and are open to these products for that reason. Some will have been hit by very big flood losses in the past and they are keen to get a better handle on the risk.”
Insurers entering the region must grapple with regulatory requirements and licensing in many countries, but JBA does not have that problem. It sells its services to clients in all countries unencumbered by such barriers. Willis says that a number of markets hold great potential as a result, including China, Vietnam, Indonesia Cambodia and Myanmar in addition to Australia, Thailand and Malaysia. He also believes Japan has good growth potential.
Waller says Singapore was the obvious location to base JBA in Asia. The country has grown in prominence as an insurance hub in recent years with most of the big insurers, reinsurers and brokers having operations there. The company says its launch was well attended by all these sectors, in addition to the risk modelling agencies, some prominent academics and representatives from the oil and gas industries with an interest in protecting their assets from flood.
“This is a new chapter for us. The welcome has been great in Singapore and we are excited about the prospects for the company in this region,” says Waller.
“Flood is a growing threat to many parts of the world with some Asian countries particularly at risk and our services can help companies and insurers better manage and insure that risk.”
Iain Willis is Asia-Pacific managing director at JBA Risk Management. He can be contacted at: email@example.com
Simon Waller is managing director of JBA Risk Management UK. He can be contacted at: firstname.lastname@example.org
JBA Risk Management, UK, Simon Waller, Asia-Pacific, Iain Willis, Insurance, Reinsurance, Risk management, Catastrophe, Flood