Torrent Technologies, a Marsh affiliate, discusses many issues connected with flood insurance in its 2023 State of Flood Report: The Way to Flood Resilience. A major consideration is the need for the public and private sectors to work together to improve community flood mitigation efforts and speed recovery following flood events. Guy Carpenter and Marsh are both businesses of Marsh McLennan.
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As climatic conditions shift and worsen, natural catastrophes are becoming more severe. They also are becoming more interconnected, exacerbating the impact of flooding. For example, persistent drought is worsening wildfires, which in turn deprive landscapes of vegetation and other natural barriers to flood. A cycle of drought coupled with atmospheric rivers is causing severe flash floods in many areas. With more communities at risk, the need for public/private partnerships to close the protection gap and develop long-term flood resilience is greater than ever.
During 2023, several instances of extreme precipitation caused massive flooding. These included: Tropical Storm Hilary, the first such storm to hit Southern California in 80 years; record flooding in western Kentucky; historic rainfall in northern New England; inundation and landslides in Italy’s Emilia-Romagna region; a rainstorm that triggered evacuations in central Greece following a prolonged drought; and the catastrophic flooding in Libya as a result of dam failure.
Catastrophe loss frequency and severity have driven up reinsurance rates for 6 consecutive years, according to Guy Carpenter. These conditions have added pressure to commercial insurers and diminished global capacity for insurance against catastrophes and other weather-related perils. Nevertheless, Torrent continues to see growth in the private flood insurance market. Worldwide, there is an ongoing need for more options in standalone flood insurance.