California-based Risk Management Solutions, Inc., one of the world’s leading providers of products and services for catastrophe risk management, announced that it has released an in-depth study, “revealing the costs to the U.K. insurance industry if an event were to occur today, similar to the catastrophic event of the 1953 floods.”
RMS said it had “performed a detailed reconstruction of the 1953 U.K. East coast storm surge flood, using the latest high-resolution digital topographic data. A repeat of the ‘flood footprint,’ with the same areas being flooded to the same depths as in the 1953 event would give a total insured property loss of over 7bn pounds [$11.38 billion] in 2003.”
It noted, however that “this is a ‘virtual loss,’ as major improvements in the quality of the sea-defenses have significantly reduced the areas that would be flooded.” The company used its “proprietary RMS(TM) U.K. Storm Surge flood catastrophe analysis technology to simulate repeats of the 1953 storm surge arriving at a range of tidal heights, and taking into account the predicted behavior of each section of improved sea-defenses,” to determine what the estimated losses might be today. “The analysis showed a mean insured property loss of 580m pounds [$943 million] from a set of around 50 simulations.”
RMS said that the material cost of the damage at the time – £40 to £50 million pounds [$65 to $81 million] – would be equivalent to over £1 billion [$1.625 billion] today. However, it also noted that “the number of properties and their value has increased significantly within the coastal floodplains, and flood is now a standard coverage in U.K. residential and commercial insurance policies.”
The disastrous floods, caused by an extreme low pressure system that swept over the U.K. and the Netherlands caused the death by drowning of over 300 people, flooded more than 24,000 houses and destroyed over 500 when it hit the coast of Eastern England. In the Netherlands, there were over 1,800 fatalities with more than 47,000 properties flooded and 9,000 destroyed. ” he extensive damage and casualties revealed the inadequacy of coastal defenses and led to major programs of improvement in both countries, including the construction of the Thames Flood Barrier near Woolwich, which became operational in 1982,” said RMS.
The published study is on RMS’ corporate web site: http://www.rms.com, as of today. RMS said it undertook the study to mark “the 50th anniversary of one of the worst natural disasters to occur in northern Europe in more than 200 years.”
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