A new research paper from Zurich Insurance Group Ltd. and several collaborators is calling for greater emphasis on building flood resilience around the world rather than emergency recovery and provides a framework for mitigating risks before floods occur.
“Empirical evidence suggests that flood risk prevention is highly cost-effective,” the report said. “Even so, more resources are put into helping communities to recover after a flood, as opposed to enhancing flood resilience.”
The report, announced Thursday, notes that floods are a universal hazard, with worldwide flood losses nearly doubling during the period from 2000 to 2009 from the prior decade. Meanwhile, over the past 20 years nearly 87% of U.S. aid spending is devoted to emergency response, reconstruction and rehabilitation, the report said, with only 13% spent on reducing and managing risks prior to disasters.
While assisting disaster recovery will always be important, it's necessary to put increased emphasis on risk mitigation, said Daniel W. Riordan, CEO for global corporate, North America at Zurich in New York. “The insurance side is critical, too,” he said. But, “Aside from the insurance side we think there's a lot that can be done in terms of prevention.”
“We know that flood affects more people than any other disaster,” Mr. Riordan said. In the case of hurricanes, for example, “Everybody talks about the wind,” he said. “But at the end of the day it's really the flooding and the storm surge that does the most damage.”
Holistic approach required
The report says that community flood resilience requires a “holistic approach,” with development and flood resilience complementary to one another and incentives provided to public and private decision makers to manage flood risks before disasters occur.
“That sounds pretty obvious,” said Erwann Michel-Kerjan, executive director of the Risk Management and Decision Processes Center at the Wharton School of the University of Pennsylvania. “If you're driving your car you want to prevent an accident. But for various behavioral reasons people tend to say, 'It's not going to happen to me.'”
In addition, communities need better information and data, the report said, allowing them to learn from one another and better monitor flood risk. “Communities must overcome behavioral, economic and institutional barriers,” according to the report.
“You have to understand how decisions are actually made to improve the decision processes,” Mr. Michel-Kerjan said. “We're not saying don't develop in high risk areas. We're saying if you have to develop in high risk areas make sure you do it in a resilient manner. That's a change in mindset.”
Zurich is testing proposals for flood risk reduction by collecting data in flood-prone countries including Indonesia, Mexico, Nepal and Peru.
The joint report was funded by the Z Zurich Foundation as part of a multiyear academic cooperation between Zurich, the Risk Management and Decision Processes Center at the Wharton School and the International Institute of Applied Systems Analysis.
Zurich launched a global flood resilience program last year to help find ways to address flood risk management, entering into an alliance with the Wharton School risk management center, the IIASA, the International Federation of Red Cross and Red Crescent Societies and international development non-governmental organization Practical Action.
The report, Enhancing community flood resilience: a way forward, can be found here.