How to Cut Florida Hurricane Losses by $51 Billion
A report issued by Lloyd’s of London recently offers a blueprint for reducing losses from a major hurricane in Florida by 61 percent, or $51 billion. The report says strict building standards for new construction and retrofitting requirements for older buildings would cut losses dramatically on the coasts. “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,” according to the report.
The study also calls for updating risk models so “planners can improve their decision making and understand what the local impact will be of climate change” The blueprint also challenged lending institutions. “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.”
Availability of private insurance will continue to be an essential element of coastal property protection, the report states. “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,” the study observes.
A summary of the report, Resilient Coasts: A Blueprint for Action, is available at www.lloyd’s.com.