A Comprehensive Solution for a Complex Peril
Inland flood is a highly complex peril—one that will only grow in importance as more homes and businesses are built in flood-prone locations. From rainfall generation to hydraulic flow, it is critical that a model capture all of the complexities that represent flood risk—and at high resolution.
The AIR inland flood models for the United States, Central Europe, Germany, and Great Britain take a physical approach to capturing flood risk, which is the only method that can account for all the complexities inherent in the peril. AIR’s fully probabilistic inland flood models enable companies to have a detailed and robust understanding of the location, frequency, and severity of flooding, helping them to assess and manage their inland flood risk for locations both on and off floodplains.
A Currency for Understanding, Pricing, and Transferring Inland Flood Risk
By modeling rainfall events in space and time, AIR’s inland flood models explicitly quantify event duration—and thereby support the evaluation of insurance contracts that incorporate hours clauses. In particular, companies can use AIR’s inland flood models to revisit the ways that flood events are defined in reinsurance contracts, which can lead to more comprehensive and effective management of flood risk.
Historically, the insurance industry has lacked rigorous tools to accurately quantify flood risk—a situation that has restricted flood insurance markets and the ability for companies to write business with confidence. That’s changed. The AIR inland flood models allow companies to uncover new opportunities, make more informed underwriting and pricing decisions, and develop truly effective risk management strategies.