AIR Worldwide has released an inland flood model for Germany, which offers a fully probabilistic approach for determining the likelihood of flood losses from all types of storms.
The model provides insurers and reinsurers with a robust tool for managing inland flood risk — allowing companies to make informed underwriting decisions, to monitor and quantify aggregate concentrations of flood risk across their portfolios, and to assess the potential impact of less frequent but large loss events.
“To meet the challenge of capturing both large-scale and small-scale precipitation patterns, AIR has adopted the innovative approach of coupling a state-of-the-art Global Climate Model (GCM) with a detailed Numerical Weather Prediction (NWP) model,” said Dr. Jayanta Guin, senior vice president of research and modeling at AIR Worldwide. “The result is a sophisticated model that simulates realistic and robust storm patterns over space and time, allowing companies to manage their risk from flooding both on and off the floodplain.”
The AIR Inland Flood Model for Germany includes on-floodplain flooding, which covers a river network extending more than 160,000 kilometers and comprising more than 30,000 stream links, and off-floodplain flooding, which is modeled according to the specifics of more than 35,000 small catchments (drainage areas) in Germany.
Flooding is a regular occurrence in Germany — and not limited to the coast or low-lying river valleys, but nearly ubiquitous due to off-floodplain flash flooding. With a significant percentage of losses from the 2002 floods occurring off-floodplain and much of that loss occurring in highly exposed urban areas, AIR has developed an explicit module for off-floodplain loss estimation. The off-floodplain model accounts for elevation, runoff, drainage backups, and facility aging at each modeled location.
Furthermore, the NWP model provides all the necessary input — liquid and frozen precipitation, surface wind, surface temperature, and solar radiation — to account for the impact of snowmelt and soil moisture conditions, both important contributors to flood risk.
Among the factors influencing the extent of property damage from flood are building characteristics such as construction material, building height, and basements. The model can also account for site-specific flood defense systems often deployed by large industrial facilities. Based on engineering analyses, findings from published research, damage surveys conducted by AIR, and insurance loss data, AIR engineers have developed flood-specific damage functions, or relationships between flood depth and the amount of damage caused to a given building/property, for 34 different construction classes and 50 occupancy classes in Germany.
Other highlights of the model include:
– A state-of-the-art approach accounts for the impact of topography and terrain on regional precipitation fields at high resolution for improved risk selection and better assessment of portfolio risk.
– Topography, soil type, geology, urbanization, and other local factors are used in calculating precipitation runoff throughout the river network.
– A physically based hydraulic model transforms river discharge to water level, or elevation. This step is critical for assessing inundation depth at each location of interest for each event and ultimately for determining loss.
– A component-based approach — one that divides a building into building fabric, fixture and fittings, and services — helps estimate the vulnerability of commercial buildings and their contents.
– Flood defenses play a critical role in protecting properties within Germany’s floodplains. The AIR flood model accounts for flood defense structures such as levees, dikes, and flood walls using a probabilistic approach that incorporates the most prominently used standards of flood protection. The model also supports custom flood defenses, which is particularly useful for accurately assessing the risk to high-value properties such as industrial facilities.
– The model supports the evaluation of reinsurance contracts incorporating a 504-hours clause as well as other durations.
– Extensive analyses of detailed loss experience data, including that from the 2002 Elbe floods, provide validation.
“Limited historical experience and company claims data are not sufficient to estimate potential losses from the most extreme events because the exposure continues to change in number, value, and location,” continued Dr. Guin. “The average annual insured loss today from inland floods in Germany is estimated around EUR 300 million, and this figure will only grow as more homes and businesses are constructed in flood-prone locations.”
Source : AIR Worldwide
