JBA releases first multi-peril flood model for Vietnam
JBA Risk Management has released a high resolution, multi-peril flood model for Vietnam, which it said will help the insurance industry better understand flood risk in Vietnam.
The Vietnam Flood Probabilistic Model is the first multi-peril (river flood and surface water) catastrophe model for the re/insurance industry, aiding risk management in Vietnam. The model has been developed to cater for the aggregated exposure portfolios while maintaining the need for high resolution flood analysis.
The event set was developed using JBA's Global Flood Event Set (GFES) methodology, resulting in tens of thousands of tropical cyclone and non-tropical cyclone driven plausible flood scenarios.
Each event can be made up of elements of one or two perils described by the return period of the flood intensity.
According to JBA Risk Management, flooding is an extremely localised peril, with hazard intensities often varying considerably on very short spatial scales with underlying topography. For this reason, the model is based on consistent 30 metre mapping and allows for detailed latitude/longitude level risk analysis with the inclusion of 646 industrial zones to enable site-level analysis.
Jane Toothill, director at JBA Risk Management, a UK-based hazard modelling company, said: “The model allows insurers to better understand which locations are most exposed to severe and frequent flooding. It will be particularly useful for understanding flood correlations between areas of major exposure such as industrial parks and large cities.”
The 2011 flooding in Thailand, which resulted in $12 billion in losses, had a huge impact on Thai industry, which had cascading global impacts. Industrial parks and factories for multinational companies were severely affected across the country.
Insurance is one of the fastest growing sectors of the Vietnamese economy. Industrial zones have been a large part of that growth, with revenues from these industrial zones increasing by 90 percent since 2014. Increasing industrial developments have encroached onto historic flood plains, so there is increasing potential for extreme flood loss in Vietnam.
