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Property insurance underwriters urgently need to ask themselves if they understand the shortcomings of standard floodplain mapping well enough to continue covering flood risk. Read the full blog post here: http://www.genre.com/knowledge/blog/what-you-dont-know-about-flood-can-hurt-you.html
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Floods rank in the top 10 global insured losses by value
with a total insured loss of USD 15.3 billion
Floods rank in the top 10 global insured losses by value
with a total insured loss of USD 15.3 billion
2012
Sandy
$25B
Floods rank in the top 10 global insured losses by value
with a total insured loss of USD 15.3 billion
2005
Katrina
$47B
2012
Sandy
$25B
Floods rank in the top 10 global insured losses by value
with a total insured loss of USD 15.3 billion
2005
Katrina
$47B
2012
Sandy
$25B $4B
2012
Europe Flooding
Floods rank in the top 10 global insured losses by value
with a total insured loss of USD 15.3 billion
2005
Katrina
$47B
2012
Sandy
$25B $4B
2011
Thailand Flooding
2012
Europe Flooding
$15B
Source: Central Europe Flooding by Jargo / CC BY-SA 3.0.
Floods rank in the top 10 global insured losses by value
with a total insured loss of USD 15.3 billion
more than 20 times Thailand's annual property premiums.
2005
Katrina
$47B
2012
Sandy
$25B $4B
2011
Thailand Flooding
2012
Europe Flooding
$15B
Source: Central Europe Flooding by Jargo / CC BY-SA 3.0.
In Canada, there are twice as many flood events as other meteorological disaster events.
In Canada, there are twice as many flood events as other meteorological disaster events.
43% Flood
In Canada, there are twice as many flood events as other meteorological disaster events.
43% Flood
16% Hail/Thunderstorm
In Canada, there are twice as many flood events as other meteorological disaster events.
43% Flood
16% Hail/Thunderstorm
12% Wildfire
In Canada, there are twice as many flood events as other meteorological disaster events.
43% Flood
16% Hail/Thunderstorm
12% Wildfire
9% Winter Storm
In Canada, there are twice as many flood events as other meteorological disaster events.
43% Flood
16% Hail/Thunderstorm
12% Wildfire
9% Winter Storm
20% Other
2013 Calgary Floods: Total damage estimates exceeded
C$45 billion.
Vancouver earthquake: C$17-22 billion for a 500-year event
Quebec flood: C$4.8-5.8 billion for a 500-year event
BC flood: C$7-10 billion for a 500-year event
Alberta flood: C$0.6-1 billion for a 500-year event
Ontario flood: C$5 billion for a 250- to 500-year event
Data source: Public Safety Canada, 2007
2013 Calgary Floods: Total damage estimates exceeded
C$45 billion.
Vancouver earthquake: C$17-22 billion for a 500-year event
Quebec flood: C$4.8-5.8 billion for a 500-year event
BC flood: C$7-10 billion for a 500-year event
Alberta flood: C$0.6-1 billion for a 500-year event
Ontario flood: C$5 billion for a 250- to 500-year event
Data source: Public Safety Canada, 2007
In terms of insurable damages, costliest disaster in Canadian history at
C$2.25 billion.
But how accurate is the data being used to underwrite this exposure?
Beware of false knowledge; it is more dangerous than ignorance.
Do insurers understand floodplain mapping well enough to underwrite
the risk due to flooding
Northern Canada
Central Canada Eastern Canada Western Canada
2013 Survey of Canada’s Largest Property/Casualty Companies
No Don’t Know
Yes No Response
The Federal Public Safety Department acknowledged the issue and ordered a new study to survey flood mapping in six countries, including the U.S.
Floodplain map boundaries are only as accurate as the topographic map
on which they are drawn. Due to the small scale of Survey maps, the flood boundaries
cannot be precisely mapped… Maps do not always represent exact
conditions on the ground.
How do we improve understanding of the Flood Risk
Increased understanding of:
Return Periods
Increased understanding of:
Flood Maps and Mapping Errors
Return Periods
Increased understanding of:
Flood Maps and Mapping Errors
Geocoding and Geocoding Errors
Return Periods
Increased understanding of:
Transforming information into
knowledge is a competitive
advantage.
Remember
Return Periods
For Flood Zone boundaries, indicate the chance of flood waters exceeding that level.
For the 100-year flood plain, the highest point of the water has a 1% chance of being exceeded in any year.
Flood Maps
Represent the primary flood risk assessment tool used by municipalities, insurance companies, banks, etc.
They do not evaluate individual properties and are very broad-based.
The 100-year flood plain is 33 meters, so everything below the line is Zone A.
All houses look the same on a flood map. Is the exposure the same?
100-Year Flood Elevation
31 m.
34 m.
32 m.
33 m.
30 m.
36 m.
39 m.
33 m.
Not all locations in the 100-year zone are the same.
Don’t rate them that way.
64 meters elevation
67 meters elevation
67.5 meters elevation
100 meters elevation
Geocoding
Assigns geographic coordinates to street addresses. Hazard mapping using geocoding technology
highlights areas that are vulnerable to a particular hazard, allowing the industry to better determine if a
specific location is subject to natural hazards.
Rooftop Resolution Inputting an address provides the latitude/longitude coordinates of the center of the parcel.
Inputting an address provides the latitude/longitude coordinates of the street in front of where the building is inferred to be.
Street Level
Rooftop vs. Street Resolution 1208
1208 SILVER LEAF CIR
1264 OAK CREST DR
1264
1223
1213
1217
1263 OAK CREST DR
1263
1228 SILVER LEAF CIR
1228
1255 1256
1260
1259
1260 OAK CREST DR
1256 OAK CREST DR
1232 SILVER LEAF CIR
1259 OAK CREST DR
1255 OAK CREST DR
1217 SILVER LEAF CIR
1223 SILVER LEAF CIR
Courtesy of NAVTEQ and CoreLogic
Calgary 2013
Aerial photo of a flooded Calgary Stampede stadium and Saddledome.
Source: The Canadian Press/Jonathan Hayward
Using the Latest Mapping Technology
Imagery Ⓒ2014 Google, Map data Ⓒ2014 Google
There is a 268-meter difference between the mapped point and where water actually started entering the facility.
If you were underwriting this risk, would “close enough” be good enough?
Underwriting using only standard flood maps
misses half the properties at risk.
About 30% of multi-claim properties located in flood zones are considered to be moderate or minimal risk.
Don’t be fooled.
Be vigilant about examining flood exposure,
risk by risk. Use all tools and technology available and understand their limitations.
Analyze elevation and topographical features that surround a risk.
To avoid adverse selection, uncover as much information as possible. And know when to investigate further.
Remember the old saying,
Close in flood underwriting puts you at great risk.
“Close only counts in horseshoes and hand grenades.”
For more information on underwriting flood exposure, contact
Tim Pappas.
© 2014 General Re Corporation | This presentation is intended to provide background information to our clients and professional staff. It is time sensitive and may need to be revised and updated periodically.
/in/timpappas in
+1 212 341 8021 p
t @timothy_pappas
