
Risks from floods, storm surges and flash floods
Underestimated natural hazards
Population density determines risk of loss
Losses caused by flood events 1980-2019: Only some 12% were insured
Overall losses: US$ 1,092bn
Flooding accounts for some 40% of all loss-related natural catastrophes since 1980, with losses worldwide totalling more than US$ 1tn. Only 12% of these losses were insured.
This is partially due to a limited range of insurance covers in some regions and low demand, even in places known to be at risk of flooding.
In addition, many losses involve public infrastructure – such as roads, railways, dykes, riverbeds and bridges – that is usually uninsured.
Climate change is exacerbating the risk situation
Floods and landslides in Thailand in 2011 resulted in the highest flood losses of all time
Rising temperatures of the atmosphere and sea surfaces are influencing precipitation patterns. Warmer air can absorb more moisture, which increases the potential for heavy rainfall. Numerous scientific studies analysed by the Intergovernmental Panel on Climate Change (IPCC) indicate a likely rise in extreme flash floods and river floods in many regions.
Flooding is regarded as the natural hazard against which precautionary measures are most effective. In Europe, for instance, the overall trend in losses (after adjustment for increases in values) has fallen – despite repeated severe floods, such as those in 2002 and 2013. There are likewise indications in North America and China that protective measures have reduced adjusted losses.
Precautionary measures



Flooding from an insurance perspective
River floods
River floods usually build up gradually – although they can sometimes happen very quickly. They usually last several days or even weeks. The geographical extent of flooding, which depends on factors such as the river’s topography, can encompass several thousand square kilometres if the river valley is flat and expansive. In narrow valleys, flooding is limited to a fairly compressed corridor along the river.
Given these possibilities, accurate risk assessments based on precise flood zones are needed to calculate insurance covers. A combination of preventive measures and insurance can minimise the overall financial burden.
Cause | Threatened areas | Loss factors | Claims | Loss prevention |
---|---|---|---|---|
Prolonged, large-scale precipitation (possibly snowmelt, tropical cyclones) | All regions near a river | - Prolonged impact of water - Water contamination (e.g. by oil) | - High loss potential (accumulation losses) | - Early warning - Structural flood control - Temporary protection of property - Relocating movable objects - Evacuation |
Storm surges
Cause | Threatened areas | Loss factors | Losses | Loss prevention |
---|---|---|---|---|
High level of water due to wind set-up,high waves | Coastal areas | - Salt water - Wave forces - Flooding | - High individual losses | - Early warning - Dykes - Evacuation - Land use |
Flash floods
Flash flooding occurs when the ground stops absorbing water during brief but torrential rainfall. Thunderstorms often cause flash floods. On sloping terrain, this can trigger a rapidly rising flood wave capable of quickly flooding dry land where it has not even rained. On flat terrain, the floodwater accumulates in lower-lying hollows, basements and underground car parks. The potential for erosion and the mechanical forces associated with the high rates of flow both play crucial roles, as they can make buildings collapse and cause enormous losses.
Many people are unaware that flash floods can occur almost anywhere – even far away from rivers. In addition, it is nearly impossible to predict flash flooding. This makes short-term loss reduction measures essentially impossible. In short, the average annual overall loss from the many flash floods that occur every year is roughly equal to the loss from the rare but spectacular "once-in-a-century events" on major rivers.
Cause | Threatened areas | Loss factors | Claims | Loss prevention |
---|---|---|---|---|
Mostly local/regional heavy rain (thunderstorms) | Practically anywhere, even far away from rivers | - Mechanical impact of fast-flowing water - Possibly large amounts of sediment - Erosion | - High frequency (but not in the same place) - Relatively local | - Sufficient drainage systems - Suitable method of construction |
Prevention and insurance solutions for water-related risks
Reinsurance solutions
Industry solutions

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