As catastrophe modeling firms began tracking potential damage from the winds of Hurricane Rita this afternoon, reinsurer Swiss Re said that its proprietary cat model can now analyze exposures to the perils of river flood and storm surge in the United States.
According to Swiss Re, the patent-pending approach to modeling these perils within its MultiSNAP catastrophe model has industry wide implications--potentially enabling insurers to accept and manage a line of business previously thought of as uninsurable.
"This technology provides for substantial benefits, but perhaps most important is that adequate coverage now can be provided where initially it was excluded, insufficient or even not available," Swiss Re said in a statement.
The USA Flood Module, Swiss Re said, is the culmination of years of dedicated research and development in designing and implementing flood modeling technology in support of Swiss Re's worldwide operations.
According to the reinsurer, from 1990 through 2002, annualized losses due to major flooding events represented 25 percent of natural catastrophe losses.
In 2004 and 2005, the flood and surging tidal waters associated with Hurricanes Ivan and Katrina produced a substantial amount of damage within the regions affected. This amount of loss burden underscores the need for the new modeling capability, Swiss Re said.
The latest release of MultiSNAP now includes earthquake, tropical cyclone, tornado/hail, windstorm and flood modules capable of analyzing a single risk or portfolio of risks on either a proportional or non-proportional basis, Swiss Re said.
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