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Flash floods are among the most dangerous natural events, and very few locations are safe from them. Last year, people living in Chile’s ­Atacama Desert, one of the driest regions on earth, learned this lesson the hard way. The apparently paradoxical claim that more people drown in the desert than die of thirst was proven to be true. Northern Chile’s Atacama Desert only gets a few millimetres of rain each year. In fact, some places there may go many years without a drop falling at all. Part of the reason for this is the region’s location between coastal mountains over 2,000 metres in altitude and the Andes, which in places tower over 6,000 metres: the two mountain ranges form a double rain shadow.

5 mm precipitation – The annual average

In addition, the region’s location between the 20th and 30th parallels south, where air masses subside and dry out, promotes the extremely dry climate. And finally, the cold Humboldt Current along the coast hinders evaporation and thus the formation of rain clouds. Very special atmospheric conditions are required for it to eventually rain. As, for example, at the end of March 2015, when after almost ten years of drought, and at the end of an extremely hot summer, a cold front moving in from the southwest channelled moist air into this desert region. For three days, there was intensive rainfall compared to normal levels.

60 mm precipitation – In a single day

On 25 March, over 60 millimetres was measured in some places, a quantity that the dry desert soil was unable to absorb. The courses of rivers like the Copiapó, which had been dry for 17 years, were suddenly transformed into raging torrents. Flash floods formed, which quickly developed into destructive mudflows due to the barren and therefore erosion-prone terrain. The situation was exacerbated by enormous boulders that were swept from the hillsides by the water. The flash floods tore a path of destruction through the towns of Copiapó and Antofagasta, something that had not happened for 80 years. Quillagua, the driest place on earth, where there had been no rain since 1919, experienced four millimetres of precipitation. Even this small quantity was enough to damage some houses.
It is not every day that you have a billion-dollar loss in the desert, especially one caused by water. The people in northern Chile now know from painful experience that it can indeed happen.

At first sight, the estimated US$ 1.5bn in overall losses and US$ 500m in insured losses seem astonishing in view of the sparse population of the Atacama Desert. But it must be remembered that one third of the world’s copper production comes from widespread deposits in Chile. Several mines had to close down temporarily. Transport to and from the mining sites is largely handled by private railway lines, most of which are insured. Damage to infrastructure was the main reason for the enormous costs. But the consequences for populated regions were also severe, with many localities left under water. There were a total of 31 confirmed deaths, with others still unaccounted for. Over 2,000 houses were completely destroyed, and more than 6,250 badly damaged. There were also losses in the agricultural sector, as there is intensive cultivation of table grapes and olives along the Copiapó. Even though most of the 2015 grapes had already been harvested, substantial losses may be expected over the next few years because of the large number of plants that were left buried under hardened mud.

Insurers face challenges

Chile is a country exposed to a variety of natural hazards. Besides the Atacama floods, it experienced two volcanic eruptions last year, and a severe earthquake followed by a five-metre tsunami, as well as droughts and bushfires. While the average insurance penetration for private urban households and commercial businesses is quite high, rural districts such as those affected in March lag some way behind. However, the Chilean insurance industry is on a firm footing. Its underwriting standards are high and there is generally adequate reinsurance cover for major catastrophes. Major earthquake events in recent years, for example, were shouldered without any great difficulty. The bulk of the half a billion dollars in insured losses comes from the mining industry, and private infrastructure, such as roads, bridges and water supply facilities. Over half of the region’s irrigation channels, and almost 30% of plantation areas were badly damaged by accumulation of silt and mud.

Virtually impossible to protect against flash floods

Flash floods are one of the most dangerous natural events – in part because they still tend to be underestimated. Worldwide, there were 105 flash flood events last year in which at least five people lost their lives – and many of these fatalities could have been avoided. While it may be understandable to want to save your car from an underground garage, it is also an extremely risky undertaking. The water often arrives extremely suddenly, brooks no obstacles, and develops incredible force. Since most vehicles are in any case insured, their loss is generally compensated for. Taking precautions against extreme flash floods is far from easy. They normally occur directly where rain is falling, but often move at great speed and sometimes outside natural watercourses. Their rarity (in terms of a particular location), in conjunction with their great destructive force, virtually precludes structural precautions. The only form of precaution is to build as far away as possible from depth lines in a valley or on a hillside – the potential routes for flash floods. It is also useful to place doors and other openings, through which water can enter, at some decimetres above ground level. While this offers no protection in extreme events, structures at least remain free from damage in moderate flash floods. The fact that flash floods can occur virtually anywhere and protective structures are simply not economically feasible in many cases makes them an ideal subject for insurance. No other prevention measure against this natural hazard is as cost-efficient as an insurance policy.

Munich Re Experts
Wolfgang Kron
Head of Research, Hydrological Hazards in Geo Risks Research
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