Cost of Floods has More Than Doubled in the Last 10 Years and now Rivals Earthquake Losses, Says New Swiss Re Publication

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Sep 06, 2012, 04:00 ET

ZURICH, September 6, 2012 /PRNewswire/ --

Flood losses are increasing at an alarming rate, while the insurability of floods provides unique challenges for the industry according to Swiss Re's latest report, Flood - an underestimated risk: Inspect, inform, insure. Coinciding with the release of the publication is the release of a flood app for iPads.

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http://multivu.prnewswire.com/mnr/prne/swissre/56573/

No other natural catastrophe impacts as many people as flooding. An estimated 500 million people are affected every year across all parts of the globe. The increase in flood claims has been significant; 1970's annual claims were USD 1-2 billion, whereas 2011's insured flood losses amounted to USD 15 billion. Recent flood events in Thailand, Australia and the Philippines show that floods now rival earthquakes and hurricanes in terms of economic losses.

Matthias Weber, Swiss Re Group Chief Underwriting Officer, says: "With this publication we want to raise greater awareness of floods and their risks. We show what it takes to tackle the challenges in flood insurance and how successful solutions might look for homeowners and companies."

Population growth, a concentration of assets in exposed areas and climate change all contribute to the increasing costs of flood damage and create challenges for insurability.

Jens Mehlhorn, Head of Flood at Swiss Re and the report's key author, says: "The USD 12 billion insured losses in Thailand really highlighted the potential for flood to cause extreme losses. The insured losses corresponded to 1800% of the country's total annual property premium."

The report shows how insurers can support risk-minimization strategies such as flood-walls and urban planning. It also investigates national flood insurance programs.

Thailand's recent flooding led to the identification of 'hot spots' -clusters of industries relevant to global supply chains located within flood prone regions. These areas face extreme losses when claims are triggered by interruptions to international supply-chains. The identification of these hot spots was enabled by Swiss Re's Global Flood Zones® model, which provides very high resolution flood maps for the entire globe.

Swiss Re is also launching a flood app for iPad, available on the App Store.

Read full release at http://multivu.prnewswire.com/mnr/prne/swissre/56573/ or http://www.swissre.com/media/news_releases

Video: http://multivu.prnewswire.com/mnr/prne/swissre/56573/

SOURCE Swiss Re