Triple-I Resilience Accelerator & # 39 ;s flood risk visualization tool improves with:
- National Flood Insurance Program (NFIP) data on "pickup rates" of U.S. counties from 2010 to 2021,
- Differences between take-up- velocities within and outside flood zones and
- in different proximity to flood zones.
These additions will expand the accelerator's visualization from only covering the current year to provide a historical perspective on how uptake rates have changed over time.
The utilization rate and resilience
The insurance utilization rate represents the proportion of persons who are entitled to a certain cover who utilizes it. In the case of flood insurance, they are calculated as the number of insurances that apply in a certain geography over the total number of eligible properties for which insurance can be purchased. and improve societies' ability to recover from harmful events. About 90 percent of natural disasters in the United States involve floods, says NFIP, and much has been written about the flood protection gap. According to the Risk Management and Decision Processes Center at Wharton School at the University of Pennsylvania, a Triple-I Resilience Accelerator partner. "Less than 25 percent of the buildings flooded by Hurricanes Harvey, Sandy and Irma had insurance. In fact, repeatedly after floods, there is evidence of the United States' large and persistent river insurance gap.
But understanding that gap to a degree that supports meaningful action requires extensive, detailed information that only the NFIP can provide. It also requires that the information be available in easy-to-use formats. This is where the Triple-I / NFIP collaboration comes into play.
Important considerations to keep in mind when looking at the utilization rate are changes compared to the previous year. if prices are per city, county or state; and if they are for all homes or homes in flood zones only. During the first quarter of 2021, Triple-Is Resilience Accelerator's flood map will be updated with four options for users to visualize:
- Annual uptake rates from 2010 to 2018,
- 2019 uptake rates based on 2018 renewals only,
- Estimates of county-wide and flood zones only catchment levels for 2020, and
- County-wide share of dwellings in the vicinity of flood zones.
In 2019, NFIP began publishing historical data on NFIP insurance cover, insurance and claims. The NFIP's decision to publish this information was a turning point for industry professionals, academics and those involved in flood insurance analysis. Triple-I's visualizations use NFIP's full and half year data from 2010 to 2019 and our own estimates, based on these data, for 2020.
Dr. Michel Léonard, CBE, Triple-I Vice President and Senior Economist, says: “We have worked closely with NFIP to ensure that our visualizations reflect the most up-to-date, accurate information available for flood insurance coverage. In addition, we wanted to add to the discussion about the NFIP's utilization rate by providing less common but still insightful ways to understand and visualize the utilization rate, such as the utilization rate for properties in flood zones or the proportion of a country's property in different proximity to flood zones.
Flood coverage, as opposed to water damage from mechanical degradation inside a house, is not included in most homeowners insurance policies, so many homeowners may not realize they do not have it if their bank did not require them to purchase it before giving a mortgage. Until recently, flood insurance was considered an "intangible" risk for private insurance companies to write, so NFIP was the only game in town.
In recent years, however, Congress passed new laws to support the emergence of a robust domestic private flood insurance market. Last year, regulators provided rules that allowed private carriers to offer flood policies outside the NFIP and to qualify for the requirement of mortgage insurance. Carriers and reinsurance companies are expanding their use of sophisticated models to guarantee flood risk, driving the growth of private sector flood insurance.
"We want to recognize and emphasize the importance of NFIP policy and data to increase our understanding of the risk of flooding," said Léonard. "Good data takes a lot of work, and the NFIP's commitment to making this information available is a perfect example of public-private partnerships that provide concrete value."