How Earth Observation Informs the Activities of the Re/Insurance Industry on Managing Flood Risk

Abstract

Abstract Flood poses significant risk to society. In many regions flood remains an uninsured peril, which means national governments, donor organizations, charities, and tax payers can end up funding the economic losses. One of the challenges the re/insurance industry faces is not having the necessary tools available with global coverage to quantify flood risk, especially in low income regions where data are often sparse. Traditional reinsurers and providers of alternative risk transfer or primary insurance rely heavily on catastrophe models to understand and manage flood risk. For high income territories with established re/insurance markets such as Europe, United States, and Japan, there are several flood models available, ranging from simple deterministic to more sophisticated probabilistic solutions. How can we increase flood risk modeling capabilities to not only include the most vulnerable populations but also supply a broader array of tools, such as quantifying the physical impacts of climate change on extreme events? This chapter discusses how Earth Observation (EO) data provides instrumental input for a number of applications, from validating and benchmarking flood solutions to estimating the exposed risks in vulnerable regions, responding to catastrophe events in real time, and increasing resilience. While EO technology is constantly evolving, challenges in the re/insurance industry remain around real-time accessibility, value-added applications, consistent global solutions such as high-resolution digital terrain models, and how to stay abreast of the wealth of data sources and portals available. Relevant industry partnerships are one way forward, and community activities such as Global Flood Risk Monitoring (GFRM), the Willis Research Network, the Lighthill Risk Network, and Oasis will be discussed.