Guy Carpenter & Company has announced that its Instrat(R) unit, which provides quantitative analysis and modelling services, has collaborated with catastrophe modeller EQECAT to develop a model to calculate sea surge losses in key coastal regions of France and Sweden.

The model, which focuses on seventeen coastal departments on the northern and western coasts of France and 27 crestas on the southwestern coast of Sweden, gives an estimate of the additional cost generated by sea surge during windstorm events, says Guy Carpenter. By incorporating historical data, information from oceanographic and meteorological stations, and detail on flood defenses and the built environment, the new model allows the correlation between wind and surge events in these regions to be calculated for the first time, according to the company.

The company claims the new sea surge model uses the detailed probabilistic windstorm event set available in EQECAT's Eurowind model as a basis for the estimation of the additional loss component caused by sea surge in windstorm events. Thus the model strives to fully address the correlation between wind and sea surge losses, and estimates the surge loss component as a proportion of the Total Insured Value (TIV), per line of business, coverage and country unit covered, caused by each surge event. Individual reinsurance structures are then applied through Guy Carpenter's financial analysis software, MetaRisk(TM).