Risk modeling for floods

Tony of COVER Magazine interviewed JBA Risk Re/Insurance Specialist Haydn Marchant & Alhaf Rajab, Head of Operations at New National Assurance, about their partnership and the increasing challenge of flood risk.

During the discussion they looked at flood risk as a significant challenge for the insurance industry, with a focus on South Africa. JBA Risk and New National Assurance have collaborated to develop flood risk modeling and analytics. The floods in the KZN area over the past years have made it a hot topic for the insurance industry. Flood events have major economic and social impacts, with billions in insurance damages and infrastructure destruction, as well as loss of lives.

Flood risk has historically been considered a secondary hazard by insurers, but due to climate change and increased frequency and severity of floods, it is now being viewed as a primary pillar. Flood risk assessment and underwriting have evolved, with JBA Risk providing tools to better understand flood risk, including predictions of flood occurrences, severity, and floodability scores at specific locations. This collaboration allows insurance companies to integrate flood risk data into their operations, including extending it to brokers and binder holders, enhancing pricing and risk management strategies.

The interview emphasizes the importance of proactive flood risk management, including sharing flood risk information with clients, enabling them to take mitigation measures. The collaboration between JBA Risk and New National Assurance is seen as a world-first, providing valuable insights into flood risk for the South African insurance market.

Listen to the discussion: