It is a clear growth opportunity for reinsurers, but flood risk also represents a very difficult challenge for reinsurers to model and price accurately, says Jeremy Walker, reinsurance underwriter at Tokio Marine Kiln.
Flood risk is an area that presents a growing opportunity for reinsurers, but one with many challenges. Increasing risk and exposure, the continued importance of state-backed insurance schemes, the difficulties in developing efficient catastrophe models and defining what constitutes a flood event are all issues that reinsurers are having to grapple with.
Flood exposure is rising relentlessly across the globe. Urbanisation in developed and developing countries has significantly increased values at risk. According to the World Bank, the population living in urban areas has increased from 43 percent to 54 percent in the last quarter century.
Tokio Marine Kiln, Flood risk, Insurance, Reinsurance, Jeremy Walker, Catastrophe model, Global