The Risks of Hazard

President Trump signed a hurricane relief bill that includes $16 billion in debt relief for the embattled National Flood Insurance Program. The flood program has a Congress mandated debt ceiling of $30.4 billion, which it reached during Harvey, Irma, and Maria (HIM). This action will allow U.S. Treasury funding of the program.

Is help on the way?

Well, kind of. Premiums are on the rise as the search for actuarial solvency continues for the NFIP. You can read the entire Insurance Journal article from April 5th titled Federal Flood Insurance Average Premium to Rise 8% but here is how it ends: ‘However the premium hikes are likely insufficient to keep the program from sinking into debt, according to a recent government report.’

What is being done currently –

PropertyCasualty360 published an article in December, 2017 that begins with this eye-opening quote, “Research conducted by a team of U.S. and U.K. scientists and engineers suggests that U.S. federal flood maps underestimate the number of Americans at risk for flood by more than 27 million people.”

A study from IOPscience gave a more onerous estimate of 41 million Americans living on the 100 year floodplain. And, with a value of $5.5 trillion! In contrast, current FEMA estimates are around 13 million Americans.

At the 2017 American Geophysical Union Meeting Dec. 11-15 in New Orleans, scientists presented a ‘redrawn’ flood map of the U.S. (coastal areas excluded) simulating every river catchment area. Intermap’s InsitePro flood mapping tool uses a mathematical tree structure called the Strahler Number to predict risk. It is a numbering system that correlates a numeric value to stream size from small tributaries to large riverways. The entire algorithm then uses our proprietary 5m seamless & contiguous bare earth elevation dataset to generate location specific flood risk scores.

Last week Insurance Journal ran a recap of the P/C Joint Industry Forum, held last month in NYC. If you underwrite flood or wildfire, go read it now and then come back here for a bit of commentary. If you are a blogger, chances are you have already read it.

Last week, we wrote about that NYT article that was the buzz of the flood community. As might have been expected, it created a little buzz. Below the line, an interesting conversation took place about flooding depths, BFEs, and how they relate to each other. There are a few thoughts in that commentary that are worth a deeper look this week. But first, a quick thank you to Christopher and Scott for their comments!

Inevitably, let’s check out Houston and Harvey. It’s not the first time we have looked at Houston (or the second, third, or fourth), because Harris County is the flooding capital of the Americas. Forget about 500 year flood zones – Houston has 6 month flood zones.