Page 38 - Insurance Times June 2021

or wants to build one. If an individual gets the Risk Y Quantity of rainfall in centimeters. Not millimeters.
Assessment Report at his location then he can make a well
Y Height of Storm Surge in meters and its depth inland
informed decision to build the assets which can withstand
the fury of the Tropical Cyclone and would enable him to Second Step is to know how many Tropical Cyclones may hit
come back to normalcy within a short period of time or
your client location and also to know their intensities in the
alternatively can opt to shift the location or to transfer the next ten (10) years.
risk at acceptable level to Insurers.
The above two steps will enable Insurance companies to
But the challenges before the Insurance companies are very Underwrite an individual risk based on realistic Maximum
high. A Tropical Cyclone catastrophe can pose a problem of Probable Loss (MPL) estimate and also to plan Reinsurance
underwriting viz. premium to be charged may not be strategy on accumulated MPLs to face the Tropical Cyclone
reflecting the risk exposure.Also since this is a catastrophic catastrophic hazard.
event, Insurance companies may be exposed to number
losses/claims in one catastrophic cyclone event which can Unity Geospatial LLP has developed a web application
result in affecting the balance sheet of Insurance companies 'TROPCYC' is now available for use at the click of the mouse.
adversely and sometimes wiping out the capital. On the But it has to be on sound foundation, reliable to meet the
other hand conservative approach in Underwriting such as need of the Insurers.
applying high tariff rates may make many Insured not to opt
for the cover while only those Insured opting for it are Data
exposed to the peril, leading to selection against Insurer.
Tropical Cyclone data in the form of Tracks of Cyclones of
There are three types of catastrophic hazards in a Tropical India Meteorological Department (IMD) from the year 1891
Cyclone viz. High Winds/Gust Winds in kilometers per hour, to till date and also published reports of (IMD) on Tropical
Flash Floods caused by heavy downpour in a short time Cyclones were studied and the data collected from them
causing damages by high velocity of water, its depth& meticulously. From the year 1990 data & tracks of cyclones
duration and Storm Surgeswashing out assets near the sea & reports are available on the website of IMD while the
coast causing heavy life and property losses. We are not able report & Tracks of Cyclone available in paper format in the
to stop the Tropical Cyclones nor can we stop economic library of the IMD at Pune. IMD reports were available from
development. But what we do then? the year 1948 onwards up to the year 1989 were available
in paper form. However IMD reports from the year 1891 to
The only option left is we assess the risk we are exposed to 1947 were not available though the Tracks of Cyclones are
and make efforts to reduce/mitigate it. available and are used.

First step is to know the risk. Where you are located or plan Tropical Cyclones which
to put up your assets (identified by Latitude/Longitude), to
Y Hit the Indian Coast only are considered. Those cyclones
know the exposure to the following hazards precisely:
which dissipated over the sea or weakened before
Y Velocity of wind in kilometers per hour,
hitting the coast are not considered.
Y Depressions & Cyclonic Storms which do not cause
significant damages to reasonably built structures are
not considered in the analysis but are included in the
study.
Y Tracks of Tropical Cyclones with intensities of 'Severe to
Super Cyclonic' storms and higher intensities are only
considered in the study.Wind Speeds, Rainfall & Storm
Surge data is derived from IMD reports.

Y Storm Surge Zones as defined & published by Indian
National Center for Ocean Services (INCOIS) - ESSO at
Hyderabad on their website are used. INCOIS - ESSO is
an Indian Government authority to issue warnings on
Tsunami caused by Earthquakes and Storm Surges

38 The Insurance Times, June 2021