Citis covered include São Paulo, Santiago and Bogotá
Reinsurance broker Willis Re has released flood risk models for key Latin American cities, including São Paulo, Santiago and Bogotá.
Willis said the models, developed by the Willis Research Network (WRN), will help clients to optimise their related portfolios and manage their downsides for flood risk. Going forward, the broker suggested the tools might also be used to consider the potential impact of climate change.
The models incorporate multiple sources of flood risk and are based on modelling techniques and analysis by flood risk assessment and modelling firm Ambiental, a WRN member. Willis said the models provide South American insurance and reinsurance firms, as well as local governmental organisations, with new information that helps to identify and manage their exposure to flash floods caused by heavy rains and riverine overflow. Related results will be available for individual companies as well as the market as a whole and will have implications on planning, reinsurance and risk mitigation.
“The cat modelling companies haven’t yet focused on Latin America and the lack of tools has made it extremely difficult for insurers to evaluate flood risk," Ambiental managing director Justin Butler said in a statement. "We’ve now gone some way to solving the problem with simple prototype flood models which can be expanded as more data is collected.”
Willis Re Brazil CEO Margo Black added: "Urban flood risk is an acute concern for Latin American (re)insurers who have been challenged by growing losses and the lack of models to guide risk management. This work, driven by the WRN, will help our clients to manage their risk and downside accurately and we look forward to making it available to the market."