Toolkit: floods – navigating the waters

Losses from floods have been on an upward trend globally, rising at a significantly faster pace than global GDP. Over the last 30 years, flood events have caused cumulative global economic losses of more than USD 1.2 trillion. In the decade through 2022, cumulative insured losses from flood events around the world of more than USD 88 billion (adjusted to USD 2023) were higher than insured flood losses during the previous decade by over 30%.

Expanding urban areas driven by population growth and migration, together with industrialisation, result in impervious surfaces covered in concrete or asphalt, leaving less area to absorb water. Similarly, destruction of water-absorbing wetlands is also likely to exacerbate flood risk. Both have the potential to contribute to more extreme and costly flooding, especially from heavier rains that scientists say are likely to accompany a changing climate.

For local governments, these factors point to the necessity of properly managing urban growth, pairing such strategies with the preservation of natural flood defenses as well as the addition of well-designed adaptive infrastructure capable of accommodating increased runoff from heavier rainfall. Individuals, businesses and governments in flood-prone areas must also make contingency plans to reduce loss of life, injuries and property damage, as well as to recovery quickly after a flood.

The strongest lever to enhance the insurability and long-term resilience of communities is to prioritize mitigation and adaptation efforts that reduce flood losses before they occur. 

There are a number of early interventions which can reduce flood impacts, for example restricting development in areas prone to flood, and creating early warning systems to allow for evacuation in cases of severe high water.

We have an important role to play as a “shock absorber” but in today’s constantly evolving world, we are much more than that. Beyond financial support, reinsurers contribute expertise in risk identification, assessment and modelling to help insurers understand accumulation threats and enhance resilience, which then trickles down to the consumer.

Today insurers need granular data, advanced modelling, and the next level of risk knowledge to build a 360-degree view of their portfolio and to better understand their exposure to flood risk. Through integration of Fathom's flood maps into CatNet®, our clients can access additional high-resolution, accurate datasets, which span the entire planet, and the ability to view multiple flood-risk models on a single platform, leading to more comprehensive risk assessments.

Find out more about our offerings across risk transfer and technology solutions:

Our RDS platform helps companies build a digital twin of their assets to get an accurate overview of exposure. The RDS Property Exposure Management solution gives risk managers insight into their property portfolio exposure. A multinational utility company, for example, uses the tool to identify which power generation assets are most exposed to natural hazards such as floods, storms, or wildfires. With wildfires posing a growing threat—especially in regions experiencing prolonged drought and extreme heat—this insight enables companies to assess the vulnerability of assets in fire-prone areas, implement targeted mitigation measures, and strengthen resilience against potential losses.

With the increased frequency and severity of extreme weather events, the world must learn from the past and continue to prepare for more occurrences. In particular, when it comes to flood management. Future-proofing society requires a multi-stakeholder approach, as no single entity or silver bullet can address these complex issues alone. Re/insurers’ expertise can be a catalyst for conversation and change, helping the public sector better understand exposures, allocate resources effectively, and develop proactive mitigation strategies.