Report
Teaser, summary, work performed and final results
Periodic Reporting for period 1 - INUNDO (INUNDO - The European Flood Database)
Teaser
Every year, natural disasters affect thousands of people, damage and destroy property and cause significant direct and indirect economic losses. Climate change is expected to increase the number of extreme weather events each year and is therefore also increasing the losses...
Summary
Every year, natural disasters affect thousands of people, damage and destroy property and cause significant direct and indirect economic losses. Climate change is expected to increase the number of extreme weather events each year and is therefore also increasing the losses related to such events. Flood disasters especially are a global threat and the potential economic losses and recovery costs related to them continue to climb. In 2013 alone, overall losses reached almost € 15 billion caused by summer flooding in Europe. In the US, flooding is the most common and costly natural disaster accounting for an average of US $ 50 billion in economic losses each year.
INUNDO addresses these challenges and provides tailored and standardized flood hazard risk information to the insurance sector and industries. We equip our customers with the accurate geospatial information they need to validate their flood risk models and therefore reduce their exposure to flood related losses. By doing so we allow them saving millions of Euros. We strive to provide helpful input and to support a range of business decisions and processes by improving risk modelling procedures.
The main objective of the INUNDO products is to support insurance related businesses in the design of their insurance schemes. Thanks to the INUNDO products, re-/insurance companies can mitigate their risks related to the probability of flooding disasters. INUNDO contributes towards reducing the cost of flood risk by improving the accuracy of risk modelling and providing a whole picture view of events. Consequently, it ensures overall efficiency, security and continuity of operations.
Work performed
Three main tasks were completed during the Phase-1 period:
1 - Analysing competing products/services on the market and conducting a detailed market segmentation;
2 - Refining the product/service definition;
3 - Development of a commercialisation strategy and development of the INUNDO business plan.
To accomplish them the following activities were undertaken:
- The INUNDO feature matrix was created defining the INUNDO products’ features in detail;
- The main business thesis for INUNDO was formulated and validated;
- A market analysis including market segmentation was performed to understand market trends, drivers and future market prospects;
- A competitive analysis was performed to determine possible competitors, products and services they offer;
- Interviews with potential clients were held to better understand the insurance markets and to collect user requirements;
- Based on the user requirement analysis the INUNDO value proposition was defined;
- A marketing plan was developed including pricing, promotion and distribution channels;
- An operational plan was outlined to estimate costs, personnel and the legal environment;
- The management and organisational structure was defined to prepare for business operations;
- Based on conservative assumptions and current market knowledge, the Net Present Value (NPV) was calculated for INUNDO to estimate profitability;
- A financial plan was developed;
- The team benefitted from external business coaching.
Final results
In order to prepare and mitigate successfully against flood natural disasters it is important to not only understand the reasons why past floods generated such significant damages but use that experience to reduce the risks in the future. Within Europe and in many regions around the globe there is a significant risk to flooding. The proposed INUNDO products and services focus on improving the understanding of insurers and help them reduce their exposure to such disasters. Using advanced modeling techniques with remotely sensed imagery and supported by other geospatial information, INUNDO provides unique products/services to the insurance industry that are currently not available on the market.
From a societal perspective, it is important to educate people on the dangers and risks of flooding especially in the context of climate change. Post flood disaster costs continue to rise and therefore it is vital that society not only plans to mitigate these costs but also that insurers take these risks into account. It is in the best interest of insurers as well as citizens to mitigate their losses. From a societal point of view, this means being able to successfully rebound from disaster. For insurance businesses, this means being able to cover their clients losses so that they can return to business as usual quickly.
INUNDO has the potential to greatly impact the insurance and re-insurance markets because even very small improvements in reducing risk of flood damage exposure produces large savings in claims. This economic impact is very important because flood risk over-exposure means that businesses and citizens may literally lose everything and not be able to return to their former quality and level of lifestyle.