JBA Risk Management, a flood risk expert based in the UK, has launched a new inland flood model specifically for Australia. This new tool aims to help insurers and risk professionals better understand and assess flood risks, especially in light of the severe flooding events that impacted South-East Queensland and Northern Rivers in 2022, which resulted in record insured losses.
The model features high-resolution flood mapping, offering a detailed view with a 5-meter resolution for major cities like Sydney, Brisbane, and Melbourne, and a 30-meter resolution for other areas. It uses advanced methods to analyze both pluvial (rain-related) and fluvial (river-related) flooding from various storm events, including both tropical and non-tropical storms.
Incorporating sophisticated 2D hydraulic simulations and terrain mapping, the model also considers sea level changes and flood defense data. Importantly, it provides projections for 2050 and 2080 based on different climate scenarios, allowing insurers to assess potential future flood risks. A sensitivity analysis tool is included, enabling users to explore various risk scenarios.
The new model is built on Oasis-enabled technology, which allows for customization. Insurers and risk professionals can adjust event sets, hazard parameters, and vulnerability data according to their specific needs. It is accessible through NASDAQ’s NMRC platform and IF Elements.
Mansi Kalra, managing director of JBA Risk Management Pte, emphasized that this model offers unprecedented insights into flood risks, supporting better portfolio management and regulatory compliance. She noted that the feedback from the market has been very positive, indicating that users appreciate the depth of information now available.
Industry leaders have recognized the model’s significance. James Knight from Aon mentioned that the model aligns well with recent major flooding events, validating its effectiveness. Stephen Lau from Finity highlighted the ongoing concern about flood risks in Australia and expressed optimism about the model’s potential to enhance understanding across various sectors, including insurance and government.
As the industry continues to advance flood risk modeling, insurers are also focused on implementing reforms in response to the 2022 floods. In early 2023, Deloitte conducted a review for the Insurance Council of Australia, outlining key recommendations to improve claims processing and preparedness. A federal inquiry led by MP Daniel Mulino suggested 86 changes to enhance how insurers manage flood-related claims.
While some insurers have made progress in implementing these recommendations, the advancements vary across the sector. Some areas have seen significant improvements, while others, particularly in technology and process enhancements, are still in progress.