Environmental expert GeoSmart Information has developed a flood risk assessment product for the mortgage and financial sectors.
FloodSmart Analytics provides analysis for flood depths, probabilities and the costs of flooding from river, coastal, surface water and groundwater sources, including climate change impacts.
GeoSmart Information said this will enable organisations across the financial services and insurance sectors to examine risk at a granular level.
Phillip Martin, head of FloodSmart Analytics at GeoSmart Information, said: “Historical experience can no longer provide an adequate data set for using quantitative statistical models, which are currently heavily relied on.
“Using inferior data will lead to sub-optimal decisions by insurers, mortgage lenders and risk analysts, so it makes sense to use the best available data.
“We’ve developed FloodSmart Analytics to enable property buyers and their lenders and insurers to establish the flood risk of a single property or a whole portfolio of assets so that decisions can be made as to the type of coverage that is necessary on insurance.
“There is little point in a consumer going to a cheaper insurance broker if they discover the specific coverage they need has been excluded.
“By using this model, everyone can make informed decisions.
“We believe FloodSmart Analytics is a game changer because it identifies a mismatch with a property and insurance cover and help the financial institutions to work with the property owner to ensure the insurance is adequate and appropriate.
“Climate change is a long-term issue in which risk financing and risk transfer methodologies are going to need common language to develop or adjust financial products, which is why FloodSmart Analytics is an important development.
“Because FloodSmart Analytics has resolution to a single building unit – or smaller – there is no loss of analytical function, even when combining very large portfolios because the detail is never lost.
“This means individual lending or insuring decisions can be tracked all the way to the risk management function and capital allocation decisions.”