A recent Suncorp analysis provides ample ammunition for insurers hoping to convince governments to spend money on flood mitigation.
The analysis,
Economic benefits of flood mitigation investments by services firm Urbis in conjunction with Suncorp, shows that two flood mitigation projects in Queensland, Australia will bring economic benefits at least five times more than their cost.
Specifically, the capital and running costs of $5.9 million, St George’s flood mitigation project will deliver protective benefits totalling $31.6 million over the next 50 years for a benefit cost ratio of 5.4. Roma’s project cost is $16.4 million, delivering protective benefits totalling $81.1 million over the next 50 years for a benefit cost ratio of 4.9.
“Councils can’t do it all themselves,” says Lisa Harrison, the Suncorp Personal Insurance executive general manager. “Local government must be given more support to protect their communities. They need the funding to make it worthwhile and many councils struggle to access the expertise to plan the solutions that work best for them.”
Harrison says that the report complemented the findings of the Productivity Commission’s recent draft report, which recommended significant increases in Federal Government funding on natural disaster mitigation.
The findings lend weight to those within the Canadian insurance industry, who have been lobbying hard for an overland flood policy, and government investment in mitigation infrastructure – especially in flood-prone urban areas, like Calgary, Alta. and downtown Toronto.
It was in the summer of 2013 that Calgary and surrounding communities were hit hard by flooding in June. In the following month, Toronto was hit by a flash flood that left the downtown core paralyzed.
A study following the Calgary flood showed that it would require a $2 billion investment in infrastructure to mitigate a similar flood event.
“We know effective flood mitigation protects vulnerable communities, safeguards property, builds stronger economies and, ultimately, reduces the cost of insurance,” says Harrison. “And as these new figures show, if properly done in the right place it’s one of the smartest investments governments can make. Our experience in disaster-prone communities tells us that it’s much better to invest once rather than pay many times over.”
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