The human cost of floods is far too high. We can change that.

Floods affect more people globally than any other type of natural hazard, causing some of the largest economic, social and humanitarian losses. The great tragedy is that much of these losses could be avoided or at least reduced.

Figures from the UN Office for Disaster Risk Reduction show that, on average, 250 million people globally are affected by floods each year. An analysis by the Aon Benfield catastrophe modelling team puts the economic cost of flooding globally at over USD 90 billion and projects it will exceed USD 500 billion by 2030.

Rising costs

The increasing cost of these events reflects a host of factors, including rapid urbanization, increasing economic wealth, the development of coastal cities, soil erosion, rising sea levels and poorly planned urban development.

Climate change also has a role to play. The Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC), notes that, “The height of a 50-year flood event has already increased in many coastal locations. A 10- to more than 100-fold increase in the frequency of floods in many places would result from a 0.5 m rise in sea level in the absence of adaptation. Local adaptation capacity (and, in particular, protection) reaches its limits for ecosystems and human systems in many places under a 1 m sea level rise.”

Interconnected risks

Estimating the full extent of these future costs, however, is increasingly difficult because, in our global economy, floods are increasingly interconnected with a host of other risk factors.

Thailand, for example, is the world’s second largest producer of electronic components and manufacturers parts for most of the world’s largest automakers. Severe flooding in 2011 had a huge knock-on effect across the global supply chain, forcing manufacturers across the globe to idle facilities. The World Banks estimates that the economic losses from the flood were in excess of USD 45 billion, only a third of which was insured.

Nor are the inter-connected risks purely economic. Floods predominantly affect the poorest and least-prepared communities. Evidence shows that repeated disasters like floods undermine societies’ and economies’ potential to develop and it may trap them in a poverty cycle.  That in turn can be reflected in geopolitical issues, like the mass immigration currently being witnessed in the Mediterranean or the rise of groups like ISIS.

Simple measures save lives

What is known is that proper flood management save lives.

Floods in Malawi, in January, 2015, for example, displaced an estimated 600,000 people and resulted in 176 deaths, but the figures could have been far worse. New technologies, such as the Malawi Spatial Data Portal, which identifies regions at risk of flooding, played an important part in evacuating many at risk communities and managing the post-event recovery process.

There are, however, significant barriers to putting such measures in place. A recently published report (.pdf) by Zurich Insurance Groups into the May 2014 floods in several Balkan states notes that out of date early warning systems, under-investment in key infrastructure like dams and levees, the legacy of war in the 1990s, and poor cross-border cooperation between the affected countries contributed to the estimated EUR 3.3 billion cost of the event.

Building resilience

There are a host of ways in which we can enhance flood resilience. Improved assessment and communications of the risks would help people make better choice and take mitigating actions. Better preparedness and community planning would lessen the cost in human live. Investments in infrastructure can help disperse flood waters and prevent secondary events like a dam bursting. Warning systems can help get people to safety, and so on.

Preparing for the aftermath of an event can also limit the damage. For instance, a major in Malawi is that more than 10% of the population suffer from HIV/AIDS and many of those who were evacuated lost access to their precious store of retroviral drugs. The destruction of their property also meant that they have lost their livelihoods. Supporting efforts to rebuild, preparing for post-event challenges like disease, understanding the decision process for people in this situation, and providing funding (either through the state or private providers like micro-insurers) are critical.

To help develop a better understanding of these challenges and develop strategies to build community resilience, Zurich launched a dedicated flood resilience program in 2013. It includes the International Federation of Red Cross and Red Crescent Societies, Practical Action, the Wharton School of the University of Pennsylvania, and the International Institute of Applied Systems Analysis in Austria.

The program, which was chosen by the UN’s Momentum for Change initiative as an exemplary Lighthouse Activity in 2014, is developing a tool to measure community flood resilience to provide a baseline for enhancing resilience in future. Part of its aim is to identify and cost measures to enhance flood resilience, which would identify the best ways to maximize investment in resilience and also, ultimately, helping policy makers calculate the potential return on investment in flood resilience and the potential impact of commercial activity and development.

The bigger challenge, however, is in developing consensus and cooperation across a wide-range of stakeholders and interests, from individuals and communities, to corporations, national government, and global partnerships. 

Disclaimer: Views expressed on this page and in the reports are not necessarily those of the Zurich Insurance Group, which accepts no responsibility for them.