As the world met in Sendai, Japan last week to discuss increasing global economic resilience against natural disasters, a new set of Economic Exposure Datasets (EEDs) was released by RMS, providing a more detailed view of potential global risks.
Catastrophe risk modelling firm RMS’ new Economic Exposure Datasets (EEDs) encompass Industrial Clusters Catalogs (ICCs) for Hong Kong, Indonesia and Malaysia, and “High Resolution” EEDs for Japan and New Zealand.
“The EEDs for Hong Kong, Indonesia and Malaysia help insurers and reinsurers to better understand and plan for risks, particularly from natural disasters,” advised RMS.
Disaster risk management has been an increasing topic of discussion throughout the insurance, reinsurance and insurance-linked securities (ILS) world in recent weeks, coming to focus at the 3rd UN World Conference on Disaster Risk Reduction (WCDRR), which was covered by Artemis.
With populations on the rise, asset values increasing and hikes in urbanisation, including a greater migration to coastal regions, the impact of a natural disaster is as costly and devastating as ever.
“While exposure data is considered relatively detailed in Japan and New Zealand, that detail cannot always be passed along the risk transfer chain,” commented Pooya Sarabandi, Senior Director of modelling at RMS.
Despite a current greater understanding of risks in Japan and New Zealand than some parts of Asia, the former regions witnessed some of the most costly and devastating natural disasters in recent memory, highlighting the need for robust risk assessment tools, notes RMS.
Sarabandi continued; “Aggregate data is often used as a substitute, which can lead to inaccuracies in risk assessment. With High-Resolution EEDs, companies will be able to use the new RMS data to reveal where they are under or overexposed, identify growth opportunities and strengthen underwriting.”
Any advancement in the understanding of potential hazard zones for re/insurers is highly valuable in the development of adequate and affordable protection products.
As global re/insurers continue to fight the pressures of a challenging market environment the EEDs offered by RMS will help firms to develop a more comprehensive view of regional risks, while highlighted exposures and growth opportunities could also lead to innovation.
Ultimately leading to more relevant products and even aid in boosting insurance penetration levels in developing regions like Asia, and also in more developed areas of the globe.
Providing some insight into the technical capabilities of its new tool, RMS explains; “The new suite of high-resolution exposure data provides nationwide coverage of building replacement values at the Chome and city/ward levels in Japan, and by census mesh block and postal code in New Zealand.”
Advising that after the Canterbury earthquake events in 2010 and 2011, over 8,000 commercial and residential properties were either destroyed by the event or in the reconstruction efforts.
To account for this “the new datasets detail post-earthquake exposure in the region,” explained RMS.
The release of its new EEDs and ICCs comes roughly a month after RMS’ industry first ‘Global Tsunami Scenario Catalog’ release, another tool that aids re/insurers understanding of global risks.
Interestingly, fellow catastrophe risk modelling firm AIR Worldwide recently announced preliminary findings from a study it conducted with the UNISDR surrounding the reduction of economic losses from natural disasters, as covered by Artemis.
So it’s clear that leading catastrophe risk modelling firms like RMS and AIR are doing their part in the fight to build the world’s resilience against the impacts of natural catastrophes.
And as the development of existing and new tools continues to be adopted by re/insurers globally, it can only result in a better understanding and approach to managing international risks.
Something that is vital in building regional and global economic resilience to the effect of natural catastrophe and weather-related hazards.
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