Guy Carpenter unveils probabilistic flood model for Indonesia

Reinsurance broker Guy Carpenter & Company, a wholly owned subsidiary of Marsh & McLennan, has launched a new flood model for Indonesia that suffers from severe flood risk due to its climate and faces a significant insurance gap. The fully probabilistic model provides countrywide coverage and enables insurers to assess their exposure to floods, the most frequently occurring natural peril in the country. Guy Carpenter said the Indonesia Flood Model is based on a 10,000-year stochastic catalogue simulating both fluvial (riverine) and pluvial (rainfall) flooding. The fluvial component of the hazard was developed using...

...hydrological and hydraulic modeling to simulate rainfall and river discharges across the river network in the country. Pluvial flooding is simulated using a methodology accounting for local climate conditions, soil type, land use, and topography.

“Indonesia suffers from very regular flooding. This is driven by natural causes such as high-intensity seasonal rainfall, and man-made influences such as increasing urban density in flood plains and deforestation. We expect to see increased impact from flooding over the near and medium term due to climate change influences,” said David Maréchal, lead hydrologist at Guy Carpenter.

Rob Bentley, CEO of global strategic advisory at Guy Carpenter, said: “The release of our Indonesia model follows the success of our Thailand, Malaysia and Philippines models. The new model covers the whole of Indonesia, replacing our previous Jakarta-only model, and includes the proposed area for the new capital city in East Kalimantan. Our new generation of models in Southeast Asia have combined event-sets, allowing us to study correlations within the region.”

Tony Gallagher, CEO for the Asia-Pacific Region at Guy Carpenter, added: “Flooding impacts thousands of people in Indonesia every year, yet the country faces a significant insurance gap which has severe implications for its economic resilience. Our industry is working to address climate change, with flood being particularly impacted in Indonesia and other countries in Asia. At Guy Carpenter, we are committed to working with our clients and partners on climate change to improve understanding and create tools such as our new flood model.”