100 year return period flood absolutely not ‘low risk’: Zurich

A report by Zurich Insurance calls for improving the language around the ‘100 year flood’ event to one that illustrates the level of risk and the consequences for individuals and communities.

We need to acknowledge that the ‘100 year return period flood (or 1 percent annual chance) is by absolutely no means ‘low risk’, the company claims in its latest issue of PERC flood reports which reviews the complete risk management cycle surrounding storm Desmond.

A 1 percent annual chance of flooding in an expensive house is actually high risk compared to other perils such as fire or windstorm damage, the authors claim. “Your new house has an expected lifetime of 50 years. If you live in a 50 year return period that equals to 2 percent annual chance flood zone, this means there is a 64 percent chance you could experience this flood event in that 50 year timespan, and it will cause significant damage and loss to you and your house if it happens," the authors explain.

The report update follows an analysis of storm ‘Desmond’ in December 2015, which caused severe flooding for homeowners and businesses across Cumbria and the north of England claiming at least three lives and flooding nearly 19,000 homes.

The report recommends better communication of hazard, probabilities, risk and actions to take when providing early warning services to communities.

Also, when the first line of flood defenses, typically the large, constructed schemes protecting entire cities or areas, are either breached or over-topped, catastrophic loss must still be avoided.

In addition, the report highlights the need to learn about and to utilise better alternatives to sand bags. A range of alternative products are now available and are easier to deploy, more cost-effective and more reliable than sandbags.

“A risk can rarely be reduced to zero so when an insurer’s involvement in a flood solution is put to the test in the ‘real world’ they will discover things that could have been done differently – sometimes even better,” said Conor Brennan, head of general insurance at Zurich UK.

“Given their recent increased frequency these extreme weather events force continuous improvement, hence the rationale for these analytical PERC reports.

“At Zurich we recognise that it must be feasible within current legislation and practice, to forbid new development on flood plains. A financial incentive is surely needed to increase the uptake or motivation to reinstate in a more resilient way. This could be a tax incentive, an allowance, a coordinated approach by the insurance industry, or other instruments to alleviate the upfront cost of the investment.”