Navigating global flood risk – A primer for actuaries

White paper 19.03.2024
Go to Navigating global flood risk – A primer for actuaries

Navigating global flood risk – A primer for actuaries

Aerial view of flooded houses next to a river
White paper

Navigating global flood risk in a non-stationary world


The insurance industry sits at the forefront of managing risk. Actuaries, the architects of risk assessment and pricing, play a critical role in ensuring the long-term sustainability of this system. However, the very foundation upon which flood risk models are built – stationarity – is under increasing threat due to climate change.

In this primer for actuaries, Fathom helps to tackle this evolving landscape. “Navigating global flood risk in a non-stationary world – A primer for actuaries” equips you with the knowledge and tools to navigate the complexities of flood risk in a changing environment.

Download the primer for actuaries

Why do actuaries need to take notice?

Traditional flood hazard models rely on the assumption of stationarity, meaning past flood events are a reliable indicator of future occurrences. This assumption is demonstrably breaking down as climate change alters weather patterns and intensifies extreme weather events. Ignoring this reality can lead to significant underestimation of flood risk, with potentially catastrophic consequences for insurers and policyholders alike.

This white paper delves into the critical issues facing flood risk modeling in a non-stationary world. Here are some key takeaways you’ll gain by downloading the full report:

Understanding the limitations of stationary flood models

The paper dissects the shortcomings of traditional modeling approaches in a changing climate. It equips you to identify potential biases and inaccuracies inherent in these models.

Incorporating cutting-edge flood risk data

Fathom provides a roadmap for integrating advanced flood risk data sources into your models. Learn how to leverage high-resolution elevation data, flood hazard maps, and dynamic climate projections for a more comprehensive understanding of risk.

Enhanced decision-making

With a more robust understanding of flood risk, you’ll be empowered to make more informed decisions regarding pricing, underwriting, and portfolio management. This translates to greater resilience for insurance companies and a more sustainable risk landscape for the industry.

A toolkit for actuaries

Fathom’s data-driven solutions empower actuaries. Our climate-conditioned data improves risk selection and pricing, while the Climate Dynamics framework allows exploring present and future flood scenarios for resilient underwriting.

The future of flood risk management hinges on adapting to a non-stationary climate. Take the first step towards building a more resilient future for your organization.

How Fathom supports actuaries

Fathom recognizes the challenges actuaries face in a changing risk environment. We offer a suite of data-driven solutions designed to empower more accurate flood risk modeling, including: globally-consistent, climate-conditioned flood hazard data, global terrain datasets, Risk Scores and catastrophe models.

The Fathom benefit for actuaries includes:

  • Improved risk selection: The ability to distinguish flood risk at a high resolution using up-to-date data means better flood underwriting decisions.
  • More granular pricing: Including our flood hazard data within pricing models means a technical price that reflects underlying risk and reduces anti-selection, lowering loss ratios.
  • Profitable growth: Grow in a targeted way where the market price more than reflects the risk.
  • Climate-driven: Present-day and future scenarios available in the flexible Climate Dynamics framework. Represent any plausible future and respond to any regulatory question. This framework is a major innovation in flood modeling, allowing users to access climate-conditioned flood maps for any projected combination of future year and climate scenario up to 2100.
  • No surprises: Understand the impact of defense assumptions, defense failure and extreme return periods to ensure your underwriting is resilient to the unexpected

Download the primer > 

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