Guy Carpenter & Company has launched a probabilistic flood model for the Philippines. The model, which encompasses the entire country, will help insurers assess flood risk, one of the most common natural hazards in the region.
The model is based on a 10,000-year stochastic catalogue simulating both fluvial (riverine) and pluvial (rainfall) flooding, including the impact of typhoons, according to Guy Carpenter. The fluvial component of the hazard was developed using advanced hydrological and hydraulic modelling to simulate river discharges across the country’s river network. Meanwhile, the model simulates pluvial flooding via an in-house methodology that accounts for local climate conditions, soil type, land use, and topography.
Insurers can use the model to produce event-loss tables, occurrence exceedance probability curves, and average annual losses at almost any level of aggregation. Outputs can then be leveraged using Guy Carpenter’s MetaRisk platform to analyse reinsurance structures and for capital modelling.
The model is powered by the Oasis Loss Modelling Framework (Oasis LMF), an open-source catastrophe modelling platform designed and built by the re/insurance industry. It incorporates data from multiple public and private institutions, including JBA, Intermap and the European Space Agency. It features up-to-date flood defence information obtained from a comprehensive survey of current mitigation projects, including those sponsored by the Japanese International Cooperation Agency (JICA).
“The Philippines has a long history of devastating flood events, and the combined impacts of climate change and rapid urbanization are aggravating the problem,” said Bengt Johnsen, head of Guy Carpenter’s Southeast Asia and Korea region. “Our model provides clients with best-in-class capabilities to quantify flood risk and make informed business decisions, both for internal risk management purposes and for the placement of reinsurance.”