30 June 2015 Insurance

JBA Risk to model Flood Re risk

Flood Re broker Guy Carpenter has selected flood modelling specialist JBA Risk Management to develop a probabilistic loss model for flooding in the UK.

Guy Carpenter was selected in January as reinsurance broker for the UK Government's scheme to pool flood risk.

JBA said its multi-peril flood model will use the latest technology to simulate flood risk at an unprecedented level of detail and will be the first model to combine river flood, coastal surge and surface water flood for the entire country, including Northern Ireland.

The model is likely to be completed later this year, with the Flood Re scheme due to go live in the first half of 2016.

The collaboration between JBA Risk Management and Guy Carpenter will last for an initial three years with JBA making annual upgrades to the model as Flood Re matures.

Jane Toothill, director at JBA Risk Management, said: “Reinsurers are preparing themselves to be best informed about the risk associated with the Flood Re placement at the same time as insurers are keen to better understand which risks should be ceded into Flood Re.

“This requires top quality and extremely high-resolution data given the complexities of underwriting high-risk areas. We’re delighted to be working with Guy Carpenter to make sure the industry is as best prepared as possible.”

Vic Jenkins, head of technical innovation for Guy Carpenter’s EMEA region, added: “It is vital that the full scale, geographic scope and complexity of the risk being underwritten is understood by both Flood Re and the insurers who will be ceding to it. This new model is a huge step forwards in this respect.

“We look forward to working with JBA in the scoping and deployment of this state-of-the-art flood model and helping our clients take their understanding of UK flood risk to a whole new level.”

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