Private Risk Advisor

Neither a scientist nor climatologist, I do not have firm views on why our global climate is changing. Meanwhile, it surprises me how many continue to deny our global climate IS changing. Hopefully, a new report issued by the UN Office for Disaster Risk Reduction (UNISDR) and the Belgian-based Centre for Research on the Epidemiology of Disasters (CRED) will lend some clarity. While the report is careful not to assert why changes have occurred, it provides clear data that may help climate change deniers accept changes in our climate have occurred over the past two decades.

The report was released to coincide with the gathering of world leaders in Paris this week to discuss plans to curb greenhouse gas emissions and prevent world temperatures rising. To examine this very readable 27 page report, either key word search the term “Human Cost of Weather Related Disasters” or or simply click this link  to access the UNISDR Weather Disasters Report 2015 to access the report online.

The report found there were an average of 335 “weather-related disasters” (floods, heatwaves, drought, earthquakes, storms, etc.) annually between 2005 and August 2015, almost twice as many as occurred during the years from 1985 to 1994.  The countries with the highest number of weather-related disasters over the past decade were the United States, with 472, China with 441, India with 288, the Philippines with 274 and Indonesia with 163.  While earthquakes, volcanoes and tsunamis often capture the headlines, they represent only 1 in 10 of the disasters defined by the impact. Floods accounted for 47% of all weather-related disasters from 1995-2015, affecting 2.3 billion people and killing 157,000. Becoming better prepared to address increased flooding is perhaps the biggest risk management take-away from the report, as supported by this important observation.

“All we can say is that certain disaster types are increasing. Floods are definitely increasing. Whether it’s increasing due to global warming, I think it’s safe to say the jury’s out on that. But rather than focus on the ifs, whys and wherefores, I think we should focus on how to manage floods.”  Debarati Guha-Sapir, professor at the Centre for Research on the Epidemiology of Disasters at UCL University in Louvain, Belgium.

Of course, the impact of the financial losses caused by weather-related disasters reflects the greater financial impact sustained in more developed areas, as evidenced by this graphic.  

While it goes without saying debate over the causes and solutions to climate change will continue, consumers should be aware ALL in the insurance industry have witnessed the changes that are occurring and the resulting impact. How the industry decides to respond to those changes will remain an evolving story.

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The Internet will eliminate many of the “Helper” businesses whose sole value is that or a mere intermediary or conduit.

Source: The Demise of The Middleman

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A study by a noted hydrologist earlier this year of major Midwestern rivers in the Journal of Earth Science found that Federal Emergency Management Agency (FEMA) and the U.S. Army Corps of Engineers (USACE) have grossly underestimated the threat of severe floods in many communities.

The implications of the error are alarming, as calculations of flood severity and frequency are used to determine how high to build levees and floodwalls, where to approve development in floodplains, and also guide flood insurance requirements and costs. Consider the impact for residents in Mark Twain’s hometown of Hannibal, Missouri.  In 2013, Hannibal had a 50-year flood, meaning a severe flood event calculated to occur once every 50 years. In 2014, Hannibal had another 50-year flood.  Of course, each year the odds of such an event are the same, 1 in 50, so statisticians would urge us to take a longer view.

Here’s a longer view: the Mississippi River also reached its 10-year flood stage in Hannibal in seven of the last eight years. Hannibal also had a 200-year flood in 2008, as well as 1993.  For those keeping score: 100 year floods twice in 25 years, 10 year floods 7 in 8 years and a 50 year flood twice in 2 years.  Experts in statistics have examined the odds and decided to search for a more plausible explanation. By the way, for those who suspect global warming is the cause, climate change seems to be only a small part of the problem.  The bigger contributor: the unintended effects of engineered river control systems.

Since you likely don’t live in Hannibal, Missouri, why does this matter?

Floods are becoming more frequent and severe, and if the calculations used to project the likelihood of severe flooding by the Army Corps of Engineers are so flawed in Hannibal, isn’t it possible those flaws are also distorting the risk of severe flooding where you reside?   To learn more about the study being referenced: www.sciencedaily.com

My Suggestion: review the few residential flood facts below and consider contacting an insurance professional to learn about the cost and benefits of adding flood insurance protection for your home(s).

• In the past 5 years, all 50 states have experienced a flood.
• Each year, floods are the number 1 natural disaster in the United States.
• Everyone is at risk, even those who do not live close to rivers and lakes or a large body of water.
• More than 20 percent of all flood claims are for properties located outside of areas designated as high-risk flood zones.

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