Next week I will be heading to Asia to try and find out how insurers, brokers, and reinsurers are handling their risk assessment, particularly for flood risk. Asia is an exciting market for property insurers, with economies growing quickly and property values becoming valuable enough to stimulate thriving markets for insurance — especially for natural catastrophe coverages. It is also a breeding ground for innovation right now, as everyone is working hard to ensure they have the necessary tools to understand risk from all natural catastrophes (and Asia gets them all!). This article by James Nash (of Guy Carpenter) summarizes the situation in Asia and their response to it very well.
I am very curious to find out how policies are being quoted in Asia right now, knowing that the available risk models and datasets are more sparse there than they are in Europe and North America. There is clearly a lot of creativity being used to ensure policies are designed as efficiently and appropriately as possible, but I think there is room for more help in the region. Flood maps do exist for all the countries in Asia, particularly those with booming property markets (Thailand, China, and Indonesia come to mind), but they are frequently “global” resolution and probably more appropriate for accumulation and reinsurance than for underwriting specific properties. There are clever ways to refine those global models for underwriting, such as risk scoring and alternative datasets (like elevation data). In-depth analysis is also a sure way to understand risks where data and models are sparse, but that gets inefficient.
Inefficiency, for any reason, leads to underwriting leakage, and based on what I have read and heard, Asia is a place where solutions that reduce underwriting leakage are in demand. Ultimately, this is what I hope to find out on this trip across the Pacific.