Balancing risk and reward

July 2, 2007

In the nearly two years since Hurricane Katrina and the New Orleans levee failures brought widespread criticism of the Federal Emergency Management Agency, FEMA has been dedicated to building a stronger, more nimble and more capable organization. We’re expanding our operational capacities, strengthening our logistical capabilities and we’re improving our core competencies: Incident management, operational planning, and emergency and public communication to better service disaster victims.

Our new approach was clearly articulated in the post-Katrina Emergency Reform Act signed by President Bush in October 2006. The Act reaffirms FEMA’s mission to “reduce the loss of life and property, and protect the nation from all hazards by leading and supporting the nation in a risk-based comprehensive emergency management system of preparedness, protection, response, recovery and mitigation.”

To improve the nation’s preparedness, FEMA and its partners must do two important things. First, we must work together across all levels of government and in full cooperation with business and industry to improve our readiness to assess, reduce and insure against risk. Second, we must inform our citizens about their responsibility to prepare and protect themselves before the next major event.

FEMA’s disaster mitigation mission is aimed at reducing loss of life and property, enabling individuals and communities to recover more rapidly from disasters, and lessening the financial impact of disasters on individuals, the U.S. treasury, and state, local and tribal communities.

To help communities and states reduce their vulnerability to hazards before they strike, FEMA’s comprehensive mitigation strategy revolves around analyzing risk, reducing risk and insuring against flood risk.

Analyzing risk

To analyze risk, FEMA assesses the impact of natural hazard events on natural and built environments. We’re now more than halfway through a comprehensive $1 billion, five-year effort to update, modernize and digitize the nation’s flood hazard maps — more than 100,000 maps in all.

These maps provide valuable data on flood risk to guide building and development decisions, and to enable the determination of flood insurance requirements and options. We support mitigation planning efforts by states and communities.

All 50 states, seven territories and 33 tribes have FEMA-approved mitigation plans. More than 12,000 communities have met the requirement to be eligible for non-emergency disaster assistance.

Risk reduction

Risk reduction takes the efforts of risk analysis and turns it into action. To reduce risk from floods and other natural hazards, FEMA provides mitigation assistance, working with states and communities to implement stronger building codes and to encourage more effective land use policies. Mitigation activities such as elevation, acquisition and retrofitting have been proven to save nearly $4 for every dollar spent.

Our experience reflects this: When a community with a sound mitigation plan is hit with a natural disaster event, that area will recover faster, rebuild stronger and be in a better position to withstand the next event.

Flood insurance program

The third element of our mitigation strategy is the National Flood Insurance Program. The NFIP is the nation’s largest single peril insurance program, with more than $1 trillion in insured assets and more than 5.4 million policyholders. It’s a true example of a successful public/private partnership in action. The U.S. Treasury backs the program, FEMA administers it and nearly 100 private insurance companies sell and service the policies whose premiums support it.

NFIP accomplishments

• More than $1 billion in flood damage is avoided each year through mitigation efforts.

• More than 20,300 communities have flood maps as a basis for flood insurance rates, insurance purchase requirements and local floodplain management programs.

• An estimated 9,000 square miles of the nation’s most flood-prone lands are protected from future development because they are designated as floodways, allowing for floodwaters to pass unhindered.

• At least 6,000 acres of previously developed floodplain land have been returned to open space.

• A significant majority of buildings now being constructed in floodplains are built according to NFIP standards.

• With 33 consecutive months of policy growth, there are now more than 5.4 million people with flood insurance protection.

Topics Flood

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Insurance Journal West July 2, 2007
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