Flood Risk Assessment, Insurance and Damage mitigation. Jeroen Aerts, VU University Amsterdam

Transcription

1 Flood Risk Assessment, Insurance and Damage mitigation Jeroen Aerts, VU University Amsterdam

2 Contents Catastrophe / risk assessment models Using multiple scenarios Future Insurance premiums Lower risk; damage mitigation measures Relation insurance & damage mitigation Willingness to purchase Insurance Other issues 2

3 Contents Catastrophe / risk assessment models Using multiple scenarios Future Insurance premiums Lower risk; damage mitigation measures Relation insurance & damage mitigation Willingness to purchase Insurance Other issues 3

4 Catastrophe flood risk modeling Exposure Flood risk /yr Hazard 4

5 549 possible storms (MIT) Exposure Flood risk /yr Hazard 5 1/10 1/100 1/500 1/500 Insurance premium

6 NYC: 549 possible storms

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8 Flood damage NYC for 549 storms New York City 1/100 1/75 Aerts et al., 2013, Risk Analysis 8

9 Future Flood risk Exposure Hazard /10 1/100 1/500 1/500 Flood risk 2010 /2050 /yr Insurance premiums

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13 Contents Catastrophe / risk assessment models Using multiple scenarios Future Insurance premiums Lower risk; damage mitigation measures Relation insurance & damage mitigation Willingness to purchase Insurance Other issues 13

14 Premium Development over Time Spatial distribution of flood risk premiums in per year for 2015 and 2040 under a low economic growth scenario and sea level rise of 24 cm, assuming no adaptation 14

15 Insurance model The Netherlands Insurers / Re- insurers Damage coverage: max 20bn Euro Households Deductibles 15

16 Long term insurance Million Euro Capital Reserve, only Dike Ring areas RC low growth GE high growth

17 Million Euro Capital Reserve, Scenario 1 RC low growth GE high growth billion Euro damage 12 billion Euro damage 17

18 Insurance model The Netherlands Government Damage coverage: > $ 5Bn Insurers / Re- insurers Damage coverage: Max. $5Bn Households Deductible: $1Bn 18

19 Capital Reserve, Scenario 1 Million Euro RC low growth GE high growth billion Euro damage 12 billion Euro damage 19

20 Contents Catastrophe / risk assessment models Using multiple scenarios Future Insurance premiums Lower risk; damage mitigation measures Relation insurance & damage mitigation Willingness to purchase Insurance Other issues 20

21 Dry / Wet Floodproofing ODPM, Scotland,

22 Insurance & Building codes NFIP: National Flood Insurance Program $250,000 building coverage only (no contents coverage), for a single-family, one-story structure without a basement 22

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25 Contents Catastrophe / risk assessment models Using multiple scenarios Future Insurance premiums Lower risk; damage mitigation measures Relation insurance & damage mitigation Willingness to purchase Insurance Other issues 25

26 Relation Flood event & implementation of pre cautionary measures (River Rhine, Germany) 26

27 Insured households more often implement mitigation measures Kreibich et al., 2005; Nat Hazards and Earth Sys Sc

28 What motivates households to implement flood proofing measures? Knowing measure works & idea of implementing measure themselves 28

29 What motivates households to implement flood proofing measures? Knowing the hazard Probability & impact 29

30 What motivates households to implement flood proofing measures? Own experience & Activity neighbors 30

31 Communicating Small Probabilities with Risk Ladders 31 31

32 Effectiveness of damage mitigation The Netherlands (Max damage in = 11 billion euros) 32

33 Contents Catastrophe / risk assessment models Using multiple scenarios Future Insurance premiums Lower risk; damage mitigation measures Relation insurance & damage mitigation Willingness to purchase Insurance Other issues 33

34 Choice Experiment

35 Demand for insurance under different scenarios (premiums adjusted to risk) Market penetration would be 50% for current conditions (49% in the USA) Will be 60% without government compensation Market for insurance is low for high probabilities > 1/

36 Contents Catastrophe / risk assessment models Using multiple scenarios Future Insurance premiums Lower risk; damage mitigation measures Relation insurance & damage mitigation Willingness to purchase Insurance Other issues 36

37 Damage to critical infrasrcuture Improve flood risk assessments, special focus on: Industrial/port areas Indirect effects: business interruption and supply-chain disruption Criticial infrastructure (e.g. energy/water supply) De Kort, 2012 Thailand,

38 Murphy Oil Spill, 2005 New Orleans 38

39 Economic losses: case Rotterdam Largest harbour in Europe Infrastructural hub: Gateway to Europe Soruce: Port authority of Rotterdam webiste 39 39

40 Economic losses Port of Rotterdam 40

41 Results economic losses model Flood damage in billions Euro Return period Direct damage Indirecte losses Total losses 1/ / /1, /2, /4, /10,

42 Thanks for your attention! 42 42