Aon Benfield announces enhanced U.S. flood model to assess 1.4 million miles of rivers for potential losses

Impact Forecasting, Aon Benfield’s catastrophe model development team, announced on Tuesday that it has enhanced its United States riverine flood model to more precisely quantify flood risk at a much higher resolution.

Aon Benfield launched the enhanced model at the 2015 Property Casualty Insurers Association of America’s annual meeting in Hollywood, Florida. The model will enable insurers to better understand the peril and apply insights to underwriting decisions and reinsurance purchases through improved data and the latest scientific research, Aon said in a press release. [click image below to enlarge]

Key enhancements to the U.S. flood model include:

• Three times the length of modelled rivers – equating to 1.4 million miles and 75,000 stochastic events;

• Advanced hydraulic-based modelling of river cross-sections every 100 metres to accurately define flood event footprints;

• Modelling of off-flood plain flash flood risk;

• High resolution digital elevation model incorporating 3 metre and 10 metre LiDAR (Light Detection And Ranging)-based data;

• More than 56,000 kilometres of government maintained levee systems; and

• New damage functions for bridges, dams and flood resistant structures.

Inland flooding has accounted for about two-thirds of all disaster declarations in the past 50 years with economic costs reaching a high of $US34 billion in 1993 (inflation-adjusted to 2015 U.S. dollars), Aon said in the release. Recently in 2015, floods impacting Texas, Oklahoma and South Carolina have caused billions of dollars of new damage and loss and reinforced the need for advanced inland flood risk models.

Related: Drenching storms easing as Texas takes stock of biggest deluge since deadly May flooding

While detailed flood maps are available in the U.S. to identify floodplains and locate properties at risk, they do not provide loss estimates across a portfolio of properties, Aon explained in the release. Impact Forecasting’s model can be used by underwriters and risk managers to support inland flood rate making, pricing and risk transfer in addition to determining site elevations and flood inundation depths for all their insured locations.

In addition, the model includes scenarios for the 2015 floods affecting Texas, Oklahoma and South Carolina, the Colorado Frontal Range Flood of 2013, the Lower Mississippi Flood of 2011, the California Central Valley Flood of 1997 and the Midwest Flood of 2008.

Related: Severe floods continue to threaten South Carolina: AIR Worldwide

“With only 35% of eligible properties within FEMA [Federal Emergency Management Agency]-designated flood plains having flood insurance, the new model opens doors for insurers to better understand their risk and strategically write new business,” said Narathip Sutchiewcharn, senior scientist at Impact Forecasting, in the release. “Our updated model incorporates improved spatial resolution, detailed river network data and extensive validation to deliver more precise flood risk quantification.”

Kelly Smith, president of Aon Benfield U.S. added that the enhanced model “adds value to our clients by enabling them to set the most appropriate premiums, purchase effective reinsurance and notably gives them the confidence to underwrite more business, supporting homeowners across the U.S. to protect their properties against this hazard.”