Guy Carpenter launches new flood model for Indonesia
Guy Carpenter & Company has launched a new fully probabilistic Indonesia Flood Model (IFM), providing countrywide coverage and enabling insurers to assess their exposure to floods, which are the most frequently occurring natural peril in Indonesia.
IFM is based on a 10,000-year stochastic catalogue simulating both fluvial (riverine) and pluvial (rainfall) flooding. The fluvial component of the hazard was developed using state-of-the-art hydrological and hydraulic modeling to simulate rainfall and river discharges across the river network in the country. Pluvial flooding is simulated using an in-house methodology accounting for local climate conditions, soil type, land use, and topography.
The model can produce event-loss tables, occurrence exceedance probability curves, and average annual losses at virtually any level of aggregation. It is powered by the Oasis Loss Modelling Framework, an open-source catastrophe modeling platform designed and built by the re/insurance industry. Outputs can be leveraged using Guy Carpenter’s MetaRisk platform to analyse reinsurance structures and for capital modeling.
David Maréchal, lead hydrologist at Guy Carpenter, said Indonesia’s flooding “is driven by natural causes such as high-intensity seasonal rainfall, and man-made influences such as increasing urban density in flood plains and deforestation. We expect to see increased impact from flooding over the near and medium term due to climate change influences.”
Rob Bentley, chief executive of global strategic advisory at Guy Carpenter, said: “The release of our Indonesia model follows the success of our Thailand, Malaysia and Philippines models. The new model covers the whole of Indonesia, replacing our previous Jakarta-only model, and includes the proposed area for the new capital city in East Kalimantan. Our new generation of models in Southeast Asia have combined event-sets, allowing us to study correlations within the region.”
Tony Gallagher, chief executive for the Asia-Pacific Region at Guy Carpenter, added: “Flooding impacts thousands of people in Indonesia every year, yet the country faces a significant insurance gap which has severe implications for its economic resilience. Our industry is working to address climate change, with flood being particularly impacted in Indonesia and other countries in Asia.”