AMSTERDAM, 3 December 2013 – Impact Forecasting, the catastrophe model development center of excellence at Aon Benfield, has launched the first probabilistic catastrophe model to understand the financial impact of flood damage in the Netherlands for property and motor. Aon Benfield is the global reinsurance intermediary and capital advisor of Aon plc (NYSE:AON).

Flood, along with wind, is one of the most prevalent natural perils in the Netherlands, having experienced notable floods in 1953, 1993 and 1995. Losses from flood have traditionally been largely covered by the government but the private insurance market is now considering how it could support Dutch people and businesses. This means a catastrophe model is crucial to understand the nature of the hazard and its loss potential to enable adequate premiums to be charged for insurance and in turn for insurers to purchase the most effective reinsurance. 

The model innovatively allows insurers to explore and better understand the extent of the damage for different hazard conditions, including: 

• Three different assumptions concerning the probability of flooding per dyke ring – an area with its own hydrological characteristics enclosed by a flood dyke – ranging from optimistic (less frequent)  to pessimistic (more frequent)

• Ability to assess effects of different motor evacuation patterns.

A co-operation with HKV, a Dutch research consultancy, and Deltares, an institute for applied research in the field of water, subsurface and infrastructure, means the model’s hazard and vulnerability components are enhanced through local knowledge on how flood risk is analysed, modelled and managed in the country. 

Radek Solnicky, flood catastrophe model developer, commented: “Our dedicated flood team has ensured the model reflects the nuances of flood in the Netherlands to provide the most accurate insights for the insurance industry. This includes drilling down to look at residential, commercial and industrial properties potentially at risk, in addition to agricultural land. For example, the model also allows a greater understanding about the resilience to flood of different buildings including more unusual properties such as greenhouses.”

Adam Podlaha, head of Impact Forecasting, added: “This model is a landmark in catastrophe model development in how insurers can quantify uncertainty of different aspects of the hazard component. The new model enables insurers to obtain a clearer picture of how the financial impacts change if we consider optimistic, realistic or pessimistic probabilities of flooding. This will empower our clients to demonstrate to various stakeholders that they really own and understand the risk.”

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About Aon Benfield

Aon Benfield, a division of Aon plc (NYSE: AON), is the world's leading reinsurance intermediary and full-service capital advisor. We empower our clients to better understand, manage and transfer risk through innovative solutions and personalized access to all forms of global reinsurance capital across treaty, facultative and capital markets. As a trusted advocate, we deliver local reach to the world's markets, an unparalleled investment in innovative analytics, including catastrophe management, actuarial and rating agency advisory. Through our professionals' expertise and experience, we advise clients in making optimal capital choices that will empower results and improve operational effectiveness for their business. With more than 80 offices in 50 countries, our worldwide client base has access to the broadest portfolio of integrated capital solutions and services. To learn how Aon Benfield helps empower results, please visit www.aonbenfield.com.

About Aon

Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 65,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world's best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit www.aon.com for more information on Aon andwww.aon.com/manchesterunited to learn about Aon's global partnership and shirt sponsorship withManchester United.