Flood risk is prevalent and increasing in almost every emerging market, and the Latin America and Caribbean regions in particular need more in-depth catastrophe modeling, according to Guy Carpenter, a global risk and reinsurance specialist.
“Catastrophe modeling can be much more than a metric for reinsurance pricing, it can become one of the key elements for guiding the growth strategy of a company,” said Manuel Chirouze, SVP of Guy Carpenter & Co., LLC, to insurance executives attending Guy Carpenter’s symposium for Latin America and Caribbean Region Partners.
Developing economies account for two-thirds of global economic growth and the expansion of wealth those regions creates opportunities for insurers and reinsurers, but there is an increasing need for better and more comprehensive risk modeling tools and data, as significant gaps in coverage and model limitations remain.
Recognizing this peril, Guy Carpenter is currently developing a flood model for six key population areas of Brazil. “A lack of quality data and modeling tools in emerging markets highlights the risk of adding inadequately priced business to a company’s portfolio when pursuing aggressive geographic diversification strategies,” Guy Carpenter said.
Guy Carpenter’s two-day symposium in Miami was attended by 75 insurance and reinsurance clients from Latin America and the Caribbean.
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