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Flood Risk and Insurance

April 2017

DOI: 10.13140/RG.2.2.27243.13608

Affiliation: National Association of Insurance Commissioners

Authors:

Dimitris Karapiperis

National Association of Insurance Commissioners

Intermap Technologies

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Difference Between Earned Premium and Claims Paid by NFIP By Year (1978–2015 in $Millions)

NFIP Policies in Force by Year (1978–2015) Sources: FEMA

NFIP Policies Occupancy Type (as of August 31, 2016)

Flood Zones in Brooklyn, NY (as of 2014)

NFIP Claims by Year (in 2015 $Millions)

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Dimitris Karapiperis

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Article

UK and Global Insurance Responses to Flood Hazard

March 2002 · Water International

David Crichton

This paper explores the question of whether it is possible to arrange sustainable flood insurance coverage for domestic properties in Canada and elsewhere and whether it should be public or private insurance. It considers the essential requirements for a sustainable insurance market, including the importance of adverse selection and the vicious circle, with particular regard to flood risks. Based ... [Show full abstract] on a critical overview of the different private and public insurance solutions to flood risks around the world, the conclusion is drawn that the “bundled” system of private insurance would have the best prospects of success and would provide the best value for money for the community. However, for private flood insurance to be sustainable, the State would need to make a conscious decision not to provide any further compensation to flood victims. Instead it should concentrate on renewing infrastructure and working in partnership with insurers on issues such as building codes and planning matters. Some suggestions are made about how such a private insurance system might be established. Support for a private insurance system could be a potentially sensitive political risk for the government, if its citizens regard the provision of flood compensation as a social duty. Some consideration is therefore given to ways in which the insurance industry has demonstrated social responsibility in connection with other issues, such as climate change and the United Nations Environment Program. Insurers can bring data, expertise on risk management, risk transfer, and claims handling expertise to the table. The State can establish the conditions for a sustainable market in the face of a growing risk. The key to success is partnerships.

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Uncertainty in surface water flood risk modelling

April 2009

Two thirds of the flooding that occurred in the UK during summer 2007 was as a result of surface water (otherwise known as `pluvial') rather than river or coastal flooding. In response, the Environment Agency and Interim Pitt Reviews have highlighted the need for surface water risk mapping and warning tools to identify, and prepare for, flooding induced by heavy rainfall events. This need is ... [Show full abstract] compounded by the likely increase in rainfall intensities due to climate change. The Association of British Insurers has called for the Environment Agency to commission nationwide flood risk maps showing the relative risk of flooding from all sources. At the wider European scale, the recently-published EC Directive on the assessment and management of flood risks will require Member States to evaluate, map and model flood risk from a variety of sources. As such, there is now a clear and immediate requirement for the development of techniques for assessing and managing surface water flood risk across large areas. This paper describes an approach for integrating rainfall, drainage network and high-resolution topographic data using Flowroute™, a high-resolution flood mapping and modelling platform, to produce deterministic surface water flood risk maps. Information is provided from UK case studies to enable assessment and validation of modelled results using historical flood information and insurance claims data. Flowroute was co-developed with flood scientists at Cambridge University specifically to simulate river dynamics and floodplain inundation in complex, congested urban areas in a highly computationally efficient manner. It utilises high-resolution topographic information to route flows around individual buildings so as to enable the prediction of flood depths, extents, durations and velocities. As such, the model forms an ideal platform for the development of surface water flood risk modelling and mapping capabilities. The 2-dimensional component of Flowroute employs uniform flow formulae (Manning's Equation) to direct flow over the model domain, sourcing water from the channel or sea so as to provide a detailed representation of river and coastal flood risk. The initial development step was to include spatially-distributed rainfall as a new source term within the model domain. This required optimisation to improve computational efficiency, given the ubiquity of `wet' cells early on in the simulation. Collaboration with UK water companies has provided detailed drainage information, and from this a simplified representation of the drainage system has been included in the model via the inclusion of sinks and sources of water from the drainage network. This approach has clear advantages relative to a fully coupled method both in terms of reduced input data requirements and computational overhead. Further, given the difficulties associated with obtaining drainage information over large areas, tests were conducted to evaluate uncertainties associated with excluding drainage information and the impact that this has upon flood model predictions. This information can be used, for example, to inform insurance underwriting strategies and loss estimation as well as for emergency response and planning purposes. The Flowroute surface-water flood risk platform enables efficient mapping of areas sensitive to flooding from high-intensity rainfall events due to topography and drainage infrastructure. As such, the technology has widespread potential for use as a risk mapping tool by the UK Environment Agency, European Member States, water authorities, local governments and the insurance industry. Keywords: Surface water flooding, Model Uncertainty, Insurance Underwriting, Flood inundation modelling, Risk mapping.

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Assessing voluntary resilience standards and impacts of flood risk information

August 2019 · Building Research and Information

Michael Wilson

Voluntary resilience standards are an emerging tool for cities to incentivize developers to incorporate climate change adaptation strategies. Urban planners and researchers, however, are still assessing their relative impacts on the design of recent large-scale development projects. This paper answers the question of whether, and at what scale, anticipated changes to mapped flood risk are ... [Show full abstract] associated with mitigation actions to accommodate climate change. A case study of the Climate Change Preparedness and Resiliency Checklist in Boston, Massachusetts presents a database of 171 unique survey responses from 104 proposed projects. Comparing developments with documentation to an internal subset of 54 projects in the Boston Planning and Development Agency’s projected Sea Level Rise – Flood Hazard Area (SLR-FHA), this paper finds projects impacted by updated Federal Emergency Management Agency (FEMA) Flood Insurance Rate Maps (FIRMs) are associated with different building uses, higher sea level rise assumptions and greater abilities to endure inundation. There are also neighbourhood-level differences in climate expertise and the projects’ ability to withstand utility disruption. Both of these observed impacts may have important implications for the formulation and application of voluntary resilience standards in other coastal cities.

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Defining the Roles of the Public and Private Sector in Risk Communication, Risk Reduction, and Risk...

January 2017 · SSRN Electronic Journal

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Improving Flood Insurance and Flood Risk Management: Insights from St. Louis, Missouri

March 2009 · Natural Hazards Review

This paper examines the history of St. Louis, Missouri in coping with flood risk over the past 15 years, with a focus on flood insurance. Six challenges to the continued management of riverine flood risk are identified and discussed. They are (1) many property owners don't buy flood insurance, (2) people underestimate flood risk, (3) we need better flood maps, (4) we have a "love affair" with ... [Show full abstract] levees, (5) flood risk is increasing over time, and (6) we take deep pride in rebuilding after a disaster. Recommendations for how to improve flood risk management in light of these challenges are offered. Focused attention is given to the possibility of long-term flood insurance contracts tied to long-term loans for risk-mitigating activities in overcoming the six challenges.

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Full-text available

Infrastructure Investment and the Insurance Industry

August 2017

Dimitris Karapiperis

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The Long Road to Adoption: How Long Does it Take to Adopt Updated County‐Level Flood Insurance Rate...

June 2019 · Risk, Hazards & Crisis in Public Policy

en Floods cause the most damage of all natural disasters in the United States. Households and communities receive much of their information on flood hazards from maps produced by the Federal Emergency Management Agency (FEMA). These maps have been criticized for many reasons: they use poor data, do not reflect a changing climate, do not capture rainfall flooding, create misperceptions about risk, ... [Show full abstract] and are often out of date. We examine this last concern, investigating how long it takes updated county‐level flood maps to be adopted across the country, using a unique nationwide data set from June 2014 to 2017. We find substantial heterogeneity in the time to adopt maps, with multiple outliers where the process far exceeds the time FEMA has estimated should be standard. Many factors may generate delay, including time for new data collection, technical challenges to revised maps, and community opposition. We also find there are differences in appeal rates and the timing of map revisions based on those appeals between inland and coastal counties and between higher and lower income communities. These correlations raise important questions for policymakers and scholars about the equity and accuracy of the nation's current approach to mapping changing flood risk. 采纳之路漫长：采用更新的县级防洪保险率地图需要多久？ zh 洪水在美国造成的自然灾害最多。家庭和社区大多从联邦紧急事务管理局（FEMA）提供的地图了解水灾信息。这些地图受到批判的原因多种多样：信息不足、不能反映多变天气、无法捕捉降雨造成的水灾、对风险的理解有误，以及经常没有更新信息。笔者检验了最后这一点，通过使用一组独特的全国性数据集（从2014年6月到2017年6月），调查了全国需要多久才能都采用更新过后的县级水灾地图。笔者从地图采纳时间中发现了大量的异质性，其中存在许多例外情况，即采纳过程所需时间远超出FEMA所预计的标准时间。造成信息更新延误的因素有很多，包括新数据收集所需时间、修订地图的技术性挑战、以及社区反对。笔者还发现，内地和沿海县区，高收入和低收入群体之间，就上诉率和地图修订时间存在差异。针对该国当前提供多变洪水风险信息时的公正性和准确性，上述关联对政策制定者和学者提出了重要问题。 El largo camino hacia la aprobación: cuánto tiempo se necesita para aprobar mapas de tarifa de seguro para las inundaciones a nivel de condado es De todos los desastres naturales en los Estados Unidos, las inundaciones son el que más daños causa. Los hogares y las comunidades reciben la mayoría de su información de los peligros de las inundaciones mediante mapas que produce la Agencia Federal para el Manejo de Emergencias (FEMA). Estos mapas han sido criticados por muchas razones: usan datos deficientes, no reflejan un clima cambiante, no captan las inundaciones de lluvia, crean percepciones erróneas sobre el riesgo y, a menudo, están desactualizados. Examinamos esta última preocupación, investigando cuánto tiempo necesita la aprobación de mapas de inundaciones actualizados a nivel de condado en todo el país, utilizando un conjunto de datos único a nivel nacional desde junio de 2014 hasta junio de 2017. Encontramos una gran heterogeneidad en el momento de aprobar mapas, con múltiples valores atípicos en los que el proceso supera con creces el tiempo que FEMA estima que debería ser estándar. Muchos factores pueden generar demoras, incluido el tiempo para la recopilación de nuevos datos, los desafíos técnicos para los mapas revisados y la oposición de la comunidad. También descubrimos que hay diferencias en las tasas de apelación y el momento en que se realizan las revisiones de los mapas en función de esas apelaciones entre los condados del interior y de la costa y entre las comunidades de ingresos más altos y más bajos. Estas correlaciones plantean preguntas importantes para los responsables políticos y académicos acerca de la equidad y la precisión del enfoque actual de la nación para hacer un mapeo cambiante del riesgo de inundación.

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Flood insurance schemes and climate adaptation in developing countries

October 2013 · International Journal of Disaster Risk Reduction