New research suggests that the financial cost of flooding could increase by more than 25% by 2050.
The University of Bristol study, published in Nature Climate Change, looked to forecast annual flood losses. It estimated that these would increase by 26.4% to $40.6bn in fewer than three decades.
Using data from Fathom, the Bristol-based flood risk modelling firm, and by analysing nation-wide property asset data and detailed flood projections, the researchers developed high-resolution assessment of flood risk in the US.
The estimates, which include damage to homes, businesses and their contents, were based on 2021-dollar values so the actual numbers would likely be much bigger factoring in inflation.
Dr. Oliver Wing, chief research officer at Fathom, was the lead author on the paper.
He said in a statement: “The mapping clearly indicates black communities will be disproportionately affected in a warming world, in addition to the poorer white communities which predominantly bear the historical risk.”
He added: “Both of these findings are of significant concern. The research is a call to action for adaptation and mitigation work to be stepped up to reduce the devastating financial impact flooding wreaks on people’s lives.”
Climate change as a topic has been increasingly at the forefront of insurers’ minds. A month ago, CRESTA said that the July floods across Europe that severely impacted parts of Germany and France were the most-expensive catastrophic event outside the US last year. That followed an announcement by SiriusPoint in September that the same floods looked to dent its Q3 results by up to $100m.
Reinsurance News reported earlier this month that 2021 was an above-average year for catastrophe activity for insurers and reinsurers. As we wrote then, while the number of international catastrophe events exceeding $1 billion in 2021 is not unusual, the accumulated loss of $21.6 billion is higher than the long-term average of $13.7 billion.
And last week, we reported that insured losses in December were nearly five times higher than average due to the wildfires in Colorado, along with tornado outbreaks across the US.
