Coût des inondations et financement des dommages

The cost and financing of flood damages

Abstract

Most of floods are perceived as catastrophes, be it on rural territories or on urban concentrated areas. The management of such events raises questions to stakeholders about damages cost estimate, then about repair financing and finally about arbitrages on risk management decision making related to these costs. The present paper covers these aspects from an insurance professional’s perspective.The meanings of measuring occurred damages are recalled, at both micro and macroeconomic levels. The contribution of statistical data used by insurance (average cost) to potential damage modelling are mentioned, as well as the resulting contribution of these modelling tools to insurance portfolio management. To illustrate are presented some results from a simulation method to asses the number of floodable dwellings par river basin, extended at the whole French metropolitan territory.After an overall view of existing financing solutions for the repairs caused by flood damages, specificities of flood insurance are put forward. A typology of the various schemes for natural hazards extended insurance coverage in Europe is displayed.Some situations of arbitrage, balancing insurance and prevention costs, are briefly indicated in the French case; economic incentive function carried out by insurance conditions, such as deductibles, case of flood expanding areas.The paper concludes with synthetic comments on the progress made in France at the interface between insurance sector and other stakeholders, on the various items under study of the cost of floods.