Growing demand for comprehensive loss data as natural disasters increase: Perils
November 7 2024 by InsuranceAsia News
While earthquakes and typhoons have historically attracted the most attention from a risk modelling and capacity perspective, the increasing frequency of loss events caused by other perils such as severe convective storms (SCS), flooding and hail is driving demand for more comprehensive data to support model development in Asia Pacific (APAC), said Darryl Pidcock, head of APAC and cyber, Perils.
“The insurance industry needs to better understand the impact of the severity and frequency of cat events, factoring in things such as climate change impacts.
“As insurance penetration grows, and development becomes more concentrated in certain regions, greater granularity and more timely data is needed for exposures (insured values) and vulnerabilities,” Pidcock said.
A recent analysis conducted by Perils focused on Queensland hailstorms, plotting hail size against damage degrees and identifying how each event can vary from a vulnerability perspective. One key finding revealed that regulatory requirements for cyclone-resilient roofing significantly increased insured claims following a hailstorm. This highlights the critical importance of high-resolution exposure and loss data in understanding regional vulnerabilities.
Pidcock noted that the insurance industry is presented with opportunities to collaborate with key stakeholders and become more innovative with how it manages data.
“There are examples of the industry already using AI as a tool for data management but arguably is still in its exploratory stage.
“The insurance industry needs to source various datasets including relating to climate change influences, exposure and vulnerability data whilst becoming more innovative in how it sources and uses this data.” Darryl Pidcock, Perils
“From Peril’s perspective, the focus is to continue expanding our reporting of industry exposures and losses in close collaboration with the industry but also enhancing the datasets and tools available to support the industry better understand risk exposures and vulnerabilities in a timelier manner,” he said.
The urgency for robust data is particularly pronounced in fast-developing countries across Asia, where the economic landscape is rapidly changing, according to Pidcock. Areas in Southeast Asia and India are experiencing significant growth driven by manufacturing and infrastructure development, yet insurance penetration remains relatively low.
“As an example, year to date from an economic loss perspective there are three Asia cat events in the global top ten, these being China summer floods, Typhoon Yagi and the Noto Peninsula Earthquake in Japan.
“Whilst economic losses are currently estimated at approximately US$50 billion from these events, insured losses to date are estimated at only US$5 billion.”
As insurance penetration grows over time, there is a need to better understand the insured exposures and vulnerabilities in these regions.
“Whilst we know typhoons and earthquakes often have a devastating impact, the increasing frequency of flood and storm-related events needs to arguably be better understood.”
Besides, with urbanisation creating more concentration of exposures and manufacturing development concentrated in many Cat-exposed regions, timely and reliable data becomes even more critical to support development of Cat models.
“The insurance industry needs to source various datasets including relating to climate change influences, exposure and vulnerability data whilst becoming more innovative in how it sources and uses this data,” said Pidcock.
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