Global flood catastrophe risk model launched by Fathom

In a timely move, specialist flood risk intelligence and data firm Fathom has announced the launch of a state-of-the-art global flood catastrophe risk model, named Global Flood Cat.

Fathom’s new flood risk models comes after a period of particularly heavy flood insurance market losses over recent years.

In 2024 alone, we’ve seen significant flood loss events in Asia, Europe, Canada, the United States and other parts of the globe, so a catastrophe risk model providing global insights for flood risks will be welcome by an industry that is increasingly concerned by the costs and impacts of pluvial events.

Flood insurance remains under-penetrated, especially in the United States and some other mature insurance marketplaces.

The availability of robust insights into flood risk, exposure and the potential costs to insurers, are all key points of information that are needed to aid in closing the flood risk protection gap and a global flood catastrophe model can only help to support that need for risk intelligence and data.

Fathom’s new Global Flood Cat model has been calibrated and tested in partnersship with world-class firms, the company said.

“This model is the most complete and customizable flood-related financial loss tool available on the market, offering an unparalleled approach to understand, quantify and manage flood risk across all perils; rainfall, river and coastal,” Fathom explained.

While large scale flood events were only linked to around US $14 billion in insured losses in 2023, according to Swiss Re data, the actual costs to economies and society were far higher.

There is a need for more deployment of insurance and reinsurance risk capital to support flood exposures around the world, but as said a prerequisite is robust risk models to provide the insights required by re/insurers.

Fathom believes its new global flood catastrophe model can help re/insurers make informed decisions, enhancing their view of risk by filling in data gaps, providing an alternative view of risk, and enabling greater accumulation management, planning and premium setting.

The company said it is the first catastrophe model of its kind to calculate the financial risk for all major flood perils: fluvial (river), pluvial (rainfall) and coastal flooding.

Fathom has also constructed a global flood exposure dataset for commercial, industrial and residential buildings, to aid in model calibration and understanding insurance industry loss exposure to flood events.

It’s good to see a new flood model come to market and especially so when it offers global insights. Better insuring and reinsuring flood risk is a key opportunity for the market, but data and analytics are required to get capital providers more comfortable that this risk is becoming better understood.