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As Asia is progressing towards higher economic growth, opportunity knocks on the door for Insurance and Reinsurance industry. However, 2011 was an unprecedented year for the region with a record number of massive catastrophes hitting Asia. Although insured losses were much lower than the overall economic losses for the region, yet, the industry took a hard hit. All this has forced the organizations and government to assess and manage this “Nat Cat Risk”. The presentation will briefly discuss the current trends in catastrophe modelling in Asia with respect to model availability. It will re-look at 2011 cat events and what message they give to our industry with a special focus on Flood risk and losses. The presentation will look at the future course of action that will help industry sail through similar or even bigger catastrophes we are sitting on.
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MS Frontier Re Modeling Research Pte. Ltd.Catastrophe Risk Assessment in AsiaRoopa Malhotra Joshi31 May 2012
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“One of life’s most painful moments comes when we must admit that we didn’t do our homework, that we are not prepared.”
Merlin Olsen, Athlete
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Agenda
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• Overview of Natural Disasters in 2011
• How Badly Was Asia Effected?
• Why Are The Numbers Bigger Now?
• Growing Threat of Flood in Asia
• Flood Profiles – Asia
• Uncertainties And Challenges in Flood Modeling
• Summary
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• Overview of Natural Disasters in 2011
• How Badly Was Asia Effected?
• Why Are The Numbers Bigger Now?
• Growing Threat of Flood in Asia
• Flood Profiles – Asia
• Uncertainties And Challenges in Flood Modeling
• Summary
Agenda
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World Map of Natural Disasters 2011
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2011 Distribution of Losses by Continent
Source: 2012 Münchener Rückversicherungs-Gesellschaft, Geo Risks Research, NatCatSERVICE -As at March 2012
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Agenda
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• Overview of Natural Disasters in 2011
• How Badly Was Asia Effected?
• Why Are The Numbers Bigger Now?
• Growing Threat of Flood in Asia
• Flood Profiles – Asia
• Uncertainties And Challenges in Flood Modeling
• Summary
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44%
2%
<1%37%
17%
Continent Insured losses in US$mAmerica(North and South America) 40,000Europe 2,000Africa Minor damagesAsia 45,000Australia/Oceania 18,000 Source: MR NatCatSERVICE
2011 Insured Losses Percentage Distribution per Continent
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13%16%
66%
5%
Continent Insured losses in US$mAmerica(North and South America) 566,000Europe 146,000Africa 2,000Asia 115,000Australia/Oceania 41,000 Source: MR NatCatSERVICE
Historical Trend (1980-2011)Insured Losses Percentage Distribution per Continent
<1%
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Historical Trend (1900-2010)Growing Pie of Asian Catastrophes
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Agenda
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• Overview of Natural Disasters in 2011
• How Badly Was Asia Effected?
• Why Are The Numbers Bigger Now?
• Growing Threat of Flood in Asia
• Flood Profiles – Asia
• Uncertainties And Challenges in Flood Modeling
• Summary
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Why Are The Numbers Bigger Now?
Economy Insurance Penetration
(source www.treasury.gov.au)
Population
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Agenda
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• Overview of Natural Disasters in 2011
• How Badly Was Asia Effected?
• Why Are The Numbers Bigger Now?
• Growing Threat of Flood in Asia
• Flood Profiles – Asia
• Uncertainties And Challenges in Flood Modeling
• Summary
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Growing Threat of Flood in Asia
Annual Average Damage ($US billion): 1990-2010
Source:"EM-DAT: The OFDA/CRED International Disaster Database, Universite catholique de Louvain, Brussels, Belgium“
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Model Availability in Asia
AIR EQECAT RMS Risk Frontiers
Country Tropical Cyclone Earthquake Tropical
Cyclone Earthquake Typhoon rainfall – flooding
Tropical Cyclone Earthquake Riverine Flood Hail
Australia a a a a a a a a
China a a a a a a a
Guam a a
Hong Kong* a a a a a
India a a a
Indonesia a a a
Japan a a a a a a a
Macau* a a
Malaysia a a a
New Zealand a a a
Pakistan a a
Philippines a a a a a a
Saipan** a
Singapore a
South Korea a a a a
Taiwan a a a a a a
Thailand a a a
* Included in China EQ
** Included in Guam EQ
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Economic Losses Due to Floods in Asia (1965 – 2001)
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World Flood Profile
http://www.preventionweb.net/english/hazards/statistics/risk.php?hid=62¹: In billions US$
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Agenda
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• Overview of Natural Disasters in 2011
• How Badly Was Asia Effected?
• Why Are The Numbers Bigger Now?
• Growing Threat of Flood in Asia
• Flood Profiles – Asia
• Uncertainties And Challenges in Flood Modeling
• Summary
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Flood Profiles - Asia
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Flood Profile - Bangladesh
Source :http://www.banglapedia.org/httpdocs/
• Situated on the Ganges Delta and the many tributaries flowing into the Bay of Bengal.
• 75% of Bangladesh is less than 10m above sea level and 80% is flood plain
• Flash flood, local flood, monsoon flood and floods due to storm surge
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Flood Profile - India
Source : UNDP flood zone map
• Out of the country's total geographical area of 329 million hectares about 45 million hectares is flood prone.
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Flood Profile - China
Source: "EM-DAT: The OFDA/CRED International Disaster Database
Summarized Table of Floods in China P Rep from 1900 to 2011
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Agenda
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• Overview of Natural Disasters in 2011
• How Badly Was Asia Effected?
• Why Are The Numbers Bigger Now?
• Growing Threat of Flood in Asia
• Flood Profiles – Asia
• Uncertainties And Challenges in Flood Modeling
• Summary
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Uncertainties and Challenges in Flood Modeling
• Metrological and hydrological data - availability and gaps
• Large amount of data – heavy to process
• Resolution of data
• Loss data for historical events
• Construction Standards
• Lack of adequate funding / interest in research and initiative from Governments
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Agenda
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• Overview of Natural Disasters in 2011
• How Badly Was Asia Effected?
• Why Are The Numbers Bigger Now?
• Growing Threat of Flood in Asia
• Flood Profiles – Asia
• Uncertainties And Challenges in Flood Modeling
• Summary
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• 2011 – Rude Awakening for Asian Insurance Industry
• Asia’s potential for large catastrophe losses is increasing due to
– growing population
– economic growth
– increasing insurance penetration
Summary
• Currently no standalone Flood Model available in Asia
• Flood models are the most complex models – large amounts of high
resolution datasets are needed
• Data quality : Garbage in – garbage out
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