Consider Flood Risk Before The Water Rises

It’s wonderful to be dry. That might sound strange, but if you’ve been touched by flood, you know exactly what I mean.

Californians know. This winter, historic floods (after years of drought) damaged homes, roads, bridges and infrastructure like the Oroville Dam, the nation’s tallest. The state’s natural resources secretary has estimated it will take US$50 billion to bolster the state’s threatened infrastructure.

Flooding caused US$62 billion in global economic losses in 2016, according to Aon Benfield. In my insurance work, I see flood disrupt companies every day, putting them out of business or dealing them long-term setbacks that erode revenue, market share and shareholder value. Even a few inches of floodwater can cause tens of thousands of dollars in damage to a home or business.

Unfortunately, climate change, globalization and rapid urban development are only increasing flood risk.

Climate Change

Our climate is warming and weather patterns are shifting, creating the potential for volatile and intense storms that can bring heavy precipitation to flood-exposed locations. In the United States, wet areas of the country will likely become wetter and dry areas drier. As California’s experience suggests, rain may be less frequent but more intense.


Businesses, especially, continue to expand their global footprints into new territories where little may be known about flood potential in those geographies. Even if the macro geography is understood, these areas often lack flood data that quickly and clearly describes the potential for flood risk at a potential building site.


Growth and development in coastal or other low-lying areas can literally change the physical landscape, often hardening it, and potentially creating new flood exposures. In the United States, half the population lives within 50 miles (80 kilometers) of the coast, and about 80 percent within 200 miles (322 kilometers), according to the federal government. Two-thirds of the world’s megacities are located in coastal zones.

Reducing the risk

The good news is that flood loss is largely preventable, not inevitable. Property owners need to take precautions when building in flood zones—but needs assessment can be labor-intensive. That’s especially true for a company venturing into areas where flood map data is inconsistent, unreliable or nonexistent, including regions of Africa, Asia, Europe and South America.

It’s frankly troubling that, until very recently, there have remained significant swaths of the world without reliable and consistent flood data. There have been satellites in the sky and smartphones in our pockets, but people have continued to build communities and businesses in flood zones—without understanding the potential exposure.

I believe that everyone will benefit from access to new flood maps like the ones we just released. They are consistent around the world, employing hydrologic and hydraulic models that reflect data on rainfall, evaporation, snowmelt and terrain.

Risk reduction will take more than a good map, however: there are also psychological hurdles to overcome. One is limited memory. Property owners should realize that major disasters may have occurred in their locales, just perhaps not in any community members’ lifetimes. That would be a strong probability in high- and moderate-hazard flood zones. Another obstacle is something akin to denial—the too-common practice of rebuilding in the very same spot devastated by a recent flood.

Flood is easy to overlook, until it strikes you unprepared. As the snow melts and summer storms approach, please take just a minute to think about the unthinkable. And appreciate the gift of being dry.

Bret Ahnell is executive vice president of FM Global, one of the world’s largest commercial and industrial property insurers.