In this article we look at the implications of extreme flooding events and their impact on corporations across the globe.
Source: JLL Global Sustainability Perspective, April 2014:SIGMA 2013 - Global Natural Catastrophe Disasters, Swiss Re, March 2014, JLL Analysis
Between 1970 and 2013, the number of weather-related catastrophes significantly increased worldwide, from 30 annually during the 1970s to 120 each year since the start of the millennium. In the last decade, we can point to the likes of Hurricane Katrina (2005) and the extensive flooding in Thailand (2011) as some of the worst examples. Two more recent examples stand out:
Such extreme events are headline-grabbing and generally contribute to the majority of losses, however, geographically spread and high-frequency rainfall can cause similar levels of damage. In the UK, for example, extraordinary levels of precipitation in 2012 caused the second-highest annual flood losses since records began.
All regions, not just those prone to extreme weather events, are therefore increasingly at risk of flooding. According to a study from the European Commission’s Joint Research Centre (2012), it is predicted that annual flood damage in Europe will rise to €46 billion by the 2050s. This is a huge increase on the average losses over the last four decades – at €5.5 billion.
Source: JLL Global Sustainability Perspective, April 2014European Commission, Geneva, 2012
A 2012 study by the London School of Economics managed to isolate the effect of a changing climate on property losses. The study showed that property losses had increased every year, even after factoring in population growth and increased value of assets over time. The increase in insured losses since the 1970s can be seen in both the USA and Germany.
Originally published : April 2014