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News  Satellite survey of Elbe flood helps Swiss Re insure for disaster
One of the worst disasters to hit Europe in the last decade has served as a case study to investigate how satellite images can improve insurance risk modelling. Following the project's end, reinsurance giant Swiss Re has added Earth Observation products to its comprehensive catastrophe database for the first time. The three-week flooding of the Elbe River in August 2002 saw water levels reach 150-year highs across parts of Central and Eastern Europe. Numerous urban centres including Dresden and Prague were inundated and the resulting insurance claims were in the multi-million Euro range.
The disaster highlighted the need for enhanced river flood modelling, and with dramatic satellite images acquired during the event, led to interest in the view from above provided by Earth Observation satellites to document flood events and better assess future flood danger.
It is common knowledge the world can be a risky place: the insurance industry has to judge precisely how risky, in order to set appropriate prices for its policies.
That is where reinsurance firms comes in: they basically sell insurance to the insurers, taking on responsibility for catastrophic risks such as earthquakes, cyclones or floods – the latter being the world's single most costly natural disaster category.
"We underwrite insurance companies' catastrophic risks, and so we take a special interest in natural perils," said Dr. Ulruich Ebel of Swiss Re's Natural Perils research department. "We have more than 20 scientists working on different aspects of natural hazards.
"Tracing and monitoring the big events gives us a business advantage and keeps our clients and stakeholders better informed. The main questions we tackle are the likely size and magnitude of such disasters, what losses they might cause, and do we charge the right prices for the policies we sell?"
"We also make use of the actual damages claimed by direct insurances to improve risk modelling," Ebel added. "However in the aftermath of events such as the 2002 Elbe flood this requires an intense effort, very expensive for routine application.
"The products delivered by our project partners enable us to improve our modelling in this area. By documenting the course of the last flood we can better simulate future flood events. We can also match the images to land-use maps, and assess risk down to the scale of individual postcodes, the satellite imagery showing us what percentage of a given postcode has been flooded."
Earth Observation data gathered on the Elbe flood has been added this month to Swiss Re's CatNet online database, which supplies client insurance companies and others with comprehensive information on worldwide hazards and potential risk exposure.
The activity has been carried out as part of a Flood Plain Monitoring project within ESA's EOMD Programme, aimed at strengthening European and Canadian capacities for the provision of geo-information services based mainly on Earth Observation data. To find out more about using Earth Observation for flood mapping or further opportunities with EOMD, please contact eomd@esa.int .
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