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US coastal flood risk on the rise 10 years after Katrina
Written by staff reporter
A decade after Hurricane Katrina caused US$41bn in property and casualty insurance losses, the most expensive catastrophe ever experienced by the global insurance industry, rising sea levels are driving up expected economic and insurance losses from hurricane-driven storm surge in coastal cities across the United States, according to new analysis from risk management firm RMS.
RMS assessed risk in six US coastal cities to determine how losses from storm surge, defined as wind-driven coastal flooding, are expected to change through 2100.
By 2100, the sea-level rise near New Orleans is expected to be greater than 1.3 metres (4.3 feet), increasing the chance of catastrophic citywide flooding by more than four times unless further improvements are made to raise flood defences by an equivalent height.
“Looking forward, New Orleans is faced with a double-whammy. The land on which the city is built is sinking, even faster than the sea levels are rising,” said Dr. Robert Muir-Wood, chief research officer at RMS. “As a result, the rise in flood heights is much faster than at any other city along the US coast.”
However, RMS analysis shows that, due to significant investments in improved flood defences and reduced exposures, the annual chance of a storm surge today causing at least US$15bn in economic losses – the amount caused by Hurricane Katrina in 2005 – is currently much lower in Orleans Parish than for cities such as Miami, New York and Tampa.
The study shows that currently, Tampa faces the highest risk among the six cities included in the study, with a one in 80 annual chance of experiencing a US$15bn storm surge loss. Miami faces a one in 125 chance, New York a one in 200 chance and New Orleans a one in 440 chance.
RMS models show those likelihoods are expected to increase greatly over time – by up to 350% in some cities by 2100. The chance of a storm surge event causing at least US$15bn in economic losses, using today’s dollar values and exposures, in 2100 rises to one in 30 in Tampa, one in 30 in Miami, one in 45 in New York and one in 315 in New Orleans.
Storm surge risk
Another way to demonstrate storm surge risk over time is to look at changing economic losses at the 100-year return period – the standard metric used by the global insurance industry to calculate the cost of risk.
According to RMS models, economic storm surge losses at the 100-year return period in New York are US$9bn today – meaning there is a one percent chance of at least that amount of losses occurring in a given year. By 2100, the figure more than doubles to US$23 billion. For comparison, Superstorm Sandy in 2012 caused just over US$15 billion in losses from storm surge in the city of New York.
Similarly large increases in 100-year return period surge losses were found for Tampa and Miami. There is a one percent chance that Tampa will experience at least US$17bn in economic storm surge losses this year. In 2100, that number rises to US$25bn. Miami’s 100-year surge losses rise from US$13bn today to US$33bn in 2100.
“Hurricane Katrina was the first time in decades that more than 50% of losses from a hurricane resulted from storm surge,” said Muir-Wood. “Katrina can be seen as a milestone in the long-term shift from wind to water as the main driver of hurricane loss. In 2012, Superstorm Sandy had more than 60% of its losses caused by storm surge flooding.”
Due to sea-level rise, by 2100 storm surge is expected to generate more than half of the economic losses that result from hurricane in the US across hurricane-exposed states.
“This analysis does not take into account the potential further impact of changes in hurricane frequency and severity that may also occur over this time, but for which there is as yet no scientific consensus,” Muir-Wood added.