Improving Disaster Resilience in ASEAN: A Practical Statistical Framework to Modeling Natural Catastrophe Risk

April 3, 2026

Climate change has increased the volatility of natural hazard frequency and severity, particularly for floods and tropical cyclones. These risks are especially acute across the Association of Southeast Asian Nations (ASEAN), where rapid population growth, accelerated urbanization in coastal and riverine areas, and uneven fiscal and insurance capacity amplify disaster impacts and recovery challenges.

To enhance financial resilience, ASEAN countries are increasingly seeking innovative disaster risk financing strategies that enable efficient risk transfer, diversification, and faster post-event support. However, the development and evaluation of these strategies rely on credible natural catastrophe modeling capabilities. Commercial CAT models can be costly, technically demanding, and proprietary, which limits their accessibility, transparency, and adaptability for local needs in emerging markets.

This report presents a practical and accessible statistical framework for catastrophe risk assessment in the region. The proposed model contains two building blocks:

• A State-Space Dynamic Count Mixture Model for forecasting disaster event frequency that captures peril-specific seasonality and regional co-movement.
• A log-linear severity model linking economic losses to population density as a forward-looking exposure proxy.

These models are applied to evaluate a cross-region risk sharing mechanism, which demonstrates how the predictive outcomes of the proposed modeling framework can be used to inform the design of innovative disaster financing solutions tailored to ASEAN markets.

Authors

Hong Li, PhD, FSA
Haibo Liu, PhD, FSA
Jianxi Su, PhD, FSA
Krittin Tangboriboonrat

Materials

Improving Disaster Resilience in ASEAN

Storm Risk Analysis

Storm Projections

Flood Risk Analysis

Flood Projections

Suggested Citation

Li, Hong, Liu, Haibo, Su, Jianxi, and Tangboriboonrat, Krittin. Improving Disaster Resilience in ASEAN: A Practical Statistical Framework to Modeling Natural Catastrophe Risk. Society of Actuaries Research Institute, March 2026. https://www.soa.org/resources/research-reports/2026/asean-cat-risk-modeling/

Acknowledgements

The researchers’ deepest gratitude goes to those without whose efforts this project could not have come to fruition: the Project Oversight Group for their diligent work overseeing, reviewing and editing this report for accuracy and relevance.

Project Oversight Group members:

Horng Cherng Lim, FSA

Tony Tan, FIA

Fiona Fuk Yee Tang, FSA

Jing Ling Zhang, LEED BD+C

At the Society of Actuaries Research Institute:

R. Dale Hall, FSA, CERA, CFA, MAAA

Jessie Li, FSA

Rose Northon

Xiao Xu, PhD, FSA, CERA

Wai Ling Yung, PhD

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