A quarter of UK properties are at risk of flood, according to a new flood model released by JBA Risk Management. The model also estimated that floods could cost UK residential properties £527 million, and that figure could rise to £1.9 billion without flood defences.
The flood model showed that flood defences could reduce losses by up to 360% across river, surface water and coastal flooding. For coastal areas, flood damage could up to 1,300% higher without coastal flood defences. The data also showed that property-level protection has the potential to make a huge difference – raising individual property defences for all residential properties in the UK may cut losses by half.
The area which is most at risk of flooding is the Hull postcode area, which makes up 6% of total estimated UK losses. This is followed by Bristol, Glasgow, Twickenham and Slough. Other high-loss postcode districts are located in and around the Thames.
“The data, and recent flood events around the world, are a clear warning that flood remains a pervasive risk that must be taken seriously,” said Nikki Pilgrim (pictured above), technical director, JBA Risk Management .“Our new UK Flood Model’s enhanced functionality enables the insurance market to fully understand their flood exposure – users can easily, and quickly, undertake ’what if’ investigations based on their own needs, see the impacts on their losses, and fully understand individual and portfolio risk profiles.”
JBA said the new model uses its FLY technology, which allows insurance firms to build models quickly at run time, rather than from traditional pre-compiled parameters. According to JBA, this brings a high level of customisation and flexibility, which, combined with 5m resolution maps, enables reinsurers to assess flood risk to individual properties, leading to better risk pricing, portfolio management, and preventing over or underinsurance.
JBA’s UK Flood Model is underpinned by the Oasis Loss Modelling Framework, making it accessible on multiple platforms, such as Oasis, Nasdaq Risk Modelling for Catastrophes, and ELEMENTS from Aon’s Impact Forecasting team. The model can also be installed in-house or delivered as a bespoke portfolio analysis service by JBA.
“I am pleased to see firms like JBA continue to invest in their flood data and modelling,” said Gary McInally, chief actuary of Flood Re. “Flooding presents a significant risk to the UK and is changing as a consequence of climate change, developing in complex ways that could have materially varying impacts across different communities in the UK. The changing climate means that access to up-to-date and detailed data will become increasingly important as organisations seek to effectively quantify and own their view of flood risk. High-quality, flexible models have a major role to play in building the understanding of that risk to inform risk management today and the building of resilience for tomorrow.”
