NU Online News Service, April 12, 2:53 p.m. EDT
Aon Benfield launched what it says is the first storm-surge model for Germany to help reinsurers and insurers quantify risk in an "underdeveloped line of coverage."
The reinsurance broker, and subsidiary of Chicago-based insurance broker Aon Corp., says that to date storm surge has generally not been included in German building policies due to carriers' inability to accurately assess the peril.
The new model, developed by Impact Forecasting, Aon Benfield's catastrophe modeler, will help firms to define their individual and aggregated exposures across the €300 billion (U.S. $435 billion at the current exchange rate) worth of structures at risk, the firm says.
The model analyzes such variables as storm frequency, wind speed, tidal movements, wave height and the efficacy of Germany's current coastal-defense systems.
History has shown the devastating effects of storm surge on the region. The 1962 North Sea Flood resulted in a storm surge that caused around hundreds of millions in damage to Hamburg. A similar event today would be far more costly given the increases in value and density of buildings and infrastructure.
Jan-Oliver Thofern, CEO of Aon Benfield Germany, says that while this model aids insurers and reinsurers in understanding the peril better, it also helps to create new opportunities for underwriters to provide insurance coverage for local businesses and residents at risk from storm-surge events.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.