Flood Accumulations

A month ago we blogged about flood events in the U.S. and U.K. (see June 28 posting) and pointed to the fact that flooding is not just a coastal issue. Now severe flooding of major rivers in England, including the Thames and Severn, has re-flooded some of the previously-hit areas, resulting in what has been described as the worst flooding to hit Britain in 60 years. In early July, the Association of British Insurers (ABI) estimated the insured losses from the June floods at  £1.5 billion ($3.1 billion). Taking into account the fresh floods, that total could now reach  £3 billion ($6.2 billion). The event illustrates how critical it is for insurers to identify and manage accumulation risk. With that in mind, we note that Guy Carpenter has announced the development of a new London flood catastrophe model for insurers. As GC’s press release states: “For insurers and reinsurers, London represents the greatest accumulation of exposure and thus the ability to accurately determine maximum potential flood loss has become an imperative for risk managers.† Check out further I.I.I. info on catastrophe modeling and flood insurance in the U.S.  Ã‚  

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