Lloyd’s of London has issued a summary of a report – “Resilient Coasts: a Blueprint for Action” – originally prepared by the Heinz Center and Ceres, which analyzes the threat to U.S. coastlines from a combination of increasingly violent weather events, triggered by climate change, and the increasing occupation of low lying areas.
The Heinz/Ceres report notes that “over half the US population lives along the Gulf and Atlantic coastlines and almost half the nation’s GDP—around $4.5 trillion—is generated there.” It also describes measures that are “simple but cost effective,” which should be undertaken to protect coastal areas.
Lloyd’s notes that the report cites the “example of 500 corporate clients of insurer FM Global, who had 85 percent less damage from Hurricane Katrina than other properties in similar areas, because they had taken measures to protect their sites against severe storms.”
The “Blueprint” It offers for newer properties calls for constructions to be built to stronger standards, and older ones to be retrofitted to “withstand severe hurricanes.” If these measures were implemented, “then the cost of major storms could be slashed. By doing so, homeowners in Florida could cut losses from a big hurricane by 61 percent, or about $51 billion.”
Lloyd’s also notes that the report urges that more attention be paid to updating risk models so that “planners can improve their decision-making and understand what the local impact will be of climate change.”
The report’s authors nonetheless recognize that it will continue to be “critical to ensure a private insurance market.” The coalition that sponsored the report included “a unique grouping comprising 23 organizations including Arup, F&C Investments, National Wildlife Federation, Wharton Risk Center and Lloyd’s among others,” said the article.
“An empowered and stable private insurance market will help ensure that unaffected taxpayers will not bear the burden of catastrophic loss. It will also provide the right price signals and incentives for risk mitigation,” said the Blueprint.
“With around $9 trillion of insured coastal property at risk, asset managers and banks should understand how exposed to climate change their investments are and work that into their investing and lending decisions,” the Blueprint concludes.
Lloyd’s summary of the report is available at: www.lloyd’s.com. To obtain the full report, go to: http://www.heinzctr.org/publications/PDF/Resilient_Coasts_Blueprint_Final.pdf
Source: Lloyd’s of London and the H. John Heinz Center
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