A “structural mismatch” is emerging with flood risk exposure in the US and the lack of insurance protection, with up to $1trn of uninsured flood losses potentially at stake, according to Moody’s.
The risk analytics company examined scenarios across the US, such as one-in-100-year flood, one-in-500-year flood and one-in-100-year flood in an intermediate emissions scenario by 2050. It said uninsured losses arise not from isolated outliers but “persistent gaps between expanding flood hazards”, which include the increased frequency and severity of flooding events.
In a one-in-a-100-year flood scenario, Moody’s said nationwide aggregate uninsured loss exposure is expected to hit $375bn with a 65% protection gap, and losses of $5bn or more could be concentrated in states like Florida, Louisiana, South Carolina and Texas.
Going up to a one-in-500-year event, nationwide uninsured loss exposure could rise to over $1trn, with a more than 70% protection gap. Moody’s said counties with potential uninsured flood losses above $5bn extend to 11 states.
The provider added that under an intermediate-emissions scenario, uninsured loss exposure could rise by about 25% on average by 2050 to around $472bn.
Companies:Moody's