Guy Carp’s New Czech Flood Model

Guy Carpenter & Company, LLC announced that its Instrat ® unit has introduced a new, fully probabilistic flood model for the Czech Republic. “The model provides insurers with a reliable, high-quality set of tools for managing potential exposures in one of the most developed insurance markets in Central Europe, with a particularly high level of penetration in the property class and a rapidly strengthening economy,” said the bulletin.

Hamish Dowlen, Vice President in Guy Carpenter’ s Munich office indicated that there has been a noticeable “increased demand from clients based in Central and Eastern Europe for new modeling approaches that can help them assess their potential exposures from natural catastrophes. This flood model, which covers all of the Czech Republic’ s major rivers and most densely populated areas, will enable insurers in this fast-growing market to better understand their losses from a wide range of potential flood scenarios.”

The new Czech flood model, which uses the recently introduced Guy Carpenter Catastrophe Analysis Toolsuite (G-CAT ™), includes the following features:
— A hazard module that utilizes a countrywide Digital Terrain Model (DTM) provided by T-MAPY and defined on a 40m x 40m grid.
— Detailed two-dimensional modeling of water propagation onto areas adjacent to rivers using the unique JFLOW-GPU distributed graphical processor technology.
— Event set data comprised of both historic events based on gauge station records and stochastic events that have been generated using Guy Carpenter’ s in-house methodology.
— A built environment module that leverages detailed land use data as well as census information to produce a building inventory, enabling a high-resolution analysis to be carried out even when the initial client’s exposure information provided for analysis is at aggregate level.
— An engineering module that addresses location-specific defense standards and includes depth-dependent loss distribution functions for each risk category available in the built environment.
— A detailed financial module allowing the calculation of ground-up and gross losses with an array of site level and policy level limits and deductibles.

Manuel Chirouze, Project Manager of the European Model Development Team in Guy Carpenter’ s Instrat ® unit, noted that as part of its risk mitigation efforts, the company has also introduced “a number of country-specific flood risk models in recent years, including Poland in 2006 and Austria earlier this year.

“With the Czech model, we are taking the next step in giving insurers the tools they need to better understand and manage their exposures in Central Europe’ s fastest-growing markets. We will also extend our modeling capabilities to include Slovakia within the next few months,” he added.

As the bulletin notes, floods are a major threat in Central Europe. The Vltava River floods in 2002 resulted in “the evacuation of some 200,000 people, economic losses in the region of €2.4 billion [$3.5 billion – at current exchange rates] and insured losses totaling approximately €1.24 billion [$1.81 billion – at current exchange rates].”

Source: Guy Carpenter –