The post Swiss Re-backed Fathom touts ‘modern view of risk’ to compete in underserved APAC appeared first on InsuranceAsia News.

“We’ve gotten a lot of questions and interest in hail risk in Japan, which has faced severe hail losses recently. We’re talking to the market to determine the need and viability for building a model for hail risk in the country,” he said.  

In APAC, Verisk currently has a hail model in Australia, which Newbold said “it has been the subject of several conversations at SIRC.” 

“Globally, that severe thunderstorm hail peril seems to be generating more interest. We call them frequency perils as they happen more often and individually have less impact, but collectively in the aggregate can be just as damaging as a typhoon,” he said, adding that Verisk also has a roadap of priorities that it is working on for other views of risk.  

“The mix of overall market need and availability of our team to deliver that model is how we’ll make that call.” 

In 2025, Verisk made a couple of investments in APAC.  

Most recently, it has launched its first inland flood models for Malaysia and Indonesia, covering a wide range of areas, including infrastructure, vehicles, marine cargo, and industrial assets. 

“At least in Malaysia, while there is some background earthquake risk, the only really cat-exposed peril is flood. So as we talk to our clients in the region who are looking for different views of risk, flood was just a logical thing for us to bring to market,” said Newbold.  

He added that with APAC suffering from one of the largest protection gaps in the world, flood is a really good example of a peril without broad insurance penetration globally. 

In 2027, Verisk is also expected to roll out the flood models for Australia and New Zealand, completing its multi-peril offering for the two countries, which already consisted of typhoon, earthquake, bushfire and hail. 

“Australia and New Zealand are the two that we’re working on right now. And after that, we’ll talk with our clients and evaluate what’s next on the roadmap,” he said. 

New models

In APAC this year, the company has also updated its South Korean typhoon model, which has a precipitation-induced flooding component to it.  

“We will continue to invest to bring updated, new models to this market. We believe that APAC plays an important role in the overall global insurance and reinsurance market,” Newbold said.  

“Our view of opportunity in the market is to use these models to help address the protection gap. The risk is insurable. It’s a question of using the tools that are available to understand the climate-exposed cat risk and help to bring coverage to markets where it’s not currently written.” 

However, data remains a big challenge, he added.  

“I think getting availability of both exposure and actual loss data to help to build and validate the models is hard.  

“Compared to the US, for example, where rooftop level, building level data is quite common, it’s harder to get that level of granular data in different APAC regions,” he said.  

“So we have data partners, we make assumptions, we do analytics, we use GIS imagery to help get that data as much as we can. But that’s probably the biggest challenge, is availability of exposure data.” 

The post Verisk eyes expansion of hail risk solutions to Japan appeared first on InsuranceAsia News.

The models are based on a static “current climate state” view derived from analysis of historical data sets.

“When catastrophe models are built, typically, the hazard module is locked down first and then the model is calibrated. As such, there is a delay between when the hazard is set and the model is released,” said Weatherhead.

“In the past, this wasn’t a significant issue, and the models were considered fit for current near-climate modelling, but given the rate of change now observed, they fall out of date quickly.”

However, there is a balance to be found between stability of modelled losses and keeping models up to date, he said.

“The (re)insurance industry does not want or expect models to change dynamically every year to reflect the latest view on climate, as this would make it difficult to also understand and manage the effects of portfolio growth,” Weatherhead added.

Rather, the current expectation is that models will only be updated every three to five years.

However, Weatherhead noted that “there are still many demands on insurers to assess their climate risk for regulatory or strategic planning purposes”.

This is driven by local regulators requiring climate-risk assessments.

However, the challenges are that different regulators choose different scenarios, so there is not  a single solution that can be applied everywhere.

“We need modelling of the baseline conditions to apply the adjustments, which can be difficult for Asia Pacific, where models don’t exist for all perils and countries,” he noted.

Guy Carpenter has developed flood models designed to allow for climate risk assessments for most countries, but there are still gaps for perils such as drought and impacts of excess heat and water shortage.

‘Secondary’ perils

While secondary perils is a misnomer, as they are driving significant loss, Weatherhead said: “The challenge in Asia is that these perils have by and large not been modelled, with the exception of Australia.”

The difficulty is that many insurance companies in the region have not yet developed internal expertise and/or technical tools to transform the raw scientific data into something that can be used for business decisions.

The challenge, according to Weatherhead, is how “we address the gap in knowledge”.

“This will change in time, but for now there is a reliance on experience-based loadings and external advice,” he added.

The newer generation of models from the larger commercial vendors, while very welcome, are still limited in their coverage and aim mostly at the larger, more established markets.

Plugging gaps

While Weatherhead does not see “too many problems with model credibility in the region, at least for the major countries and perils”, the bigger issue “is the quality of the data going into the models from the exposure side”.

“This is very mixed across the region. In some countries, detailed location-level data is the standard; in others, its data aggregated to province or even country level. However, we do see data improving every year,” he added.

Most insurance companies are working to improve their data, and there is a realisation that if they do not, they are at a disadvantage compared to their peers.

Location-level data allows for better representation of the splits between building and content values, and other secondary factors such as building height and construction.

“This can substantially change the modelling results and give a much-improved view of the risk,” he noted.

The post Asia’s cat modelling challenge is addressing the gap in knowledge: Guy Carpenter appeared first on InsuranceAsia News.

The post JBA to open India office amid rising demand for flood risk data appeared first on InsuranceAsia News.

The post New Zealand adaptation framework will develop national flood map, strengthen climate change legislation appeared first on InsuranceAsia News.

The post Q3 nat cat losses at two-decade low of US$50bn: Gallagher Re appeared first on InsuranceAsia News.

The post Eye in the sky expands tropical cyclone coverage across Australia, Japan to ‘fill the gap’ amid rising demand appeared first on InsuranceAsia News.

The post ‘Fundamental shift’ in risk landscape as average annual losses rise to US$152bn: Verisk appeared first on InsuranceAsia News.

The post Perils expands real-time insurance industry loss forecasts to Japanese typhoons appeared first on InsuranceAsia News.

The post Perils expands SCS coverage to Japan, New Zealand appeared first on InsuranceAsia News.