The National Flood Insurance Program A Model for Risk Management

Transcription

1 The National Flood Insurance Program A Model for Risk Management

2 NFIP: U.S. Risk Management Model Risk Identification Risk Assessment Risk Insurance Risk Communication Risk Management (Mitigation)

3 NFIP: Agreements Between the US Federal Government and Local Governments Local governments will mitigate flood hazards US Government provides flood Insurance to property owners

4 NFIP Status 20,000 NFIP Communities 23,000 communities w/ NFIP flood hazard areas 4.4+ million flood insurance policies in effect $1.6 billion in annual earned premiums Average annual losses paid: $800 Total insurance coverage in force: $640 billion Average annual risk management savings: $1 billion

5 NFIP History & Background 1930s-1960s Flood control structural solutions (dikes, dams, levies, stream channelization) 1950s Hurricane flooding legislation no funding 1960s Feasibility study and report to Congress 1968 Program National Flood Insurance Act National Flood Insurance

6 NFIP History & Background Findings: Floods increased the burden on the Nation s resources Structural flood control measures have not worked Flood insurance encourages sound land use practices that minimize exposure to flood hazards

7 NFIP History & Background Findings continued: The flood insurance industry could not offer economically viable terms and conditions The insurance industry was willing to carry out a government-backed flood insurance program A national flood insurance program should be based on a sound, nationwide floodplain management system

8 NFIP History & Background Purposes: Authorize Federal government-private sector flood insurance nationwide Equitably distribute cost burden among policy holders and the general public Encourage State and local governments to promote sound land use management practices to minimize flood losses

9 NFIP History & Background Purposes continued: Encourage lending institutions to help FEMA promote NFIP objectives Promote floodplain management in all Federal government activities Implement flood hazard studies to constantly reappraise the NFIP and it s land-use effects

10 NFIP History & Background NFIP not expanding as intended 1973 Flood Disaster Protection Act Increased coverage amounts Mandates flood insurance purchase Re-affirmed 100-year flood standard Weak Mandatory Purchase Requirements

11 NFIP History & Background 1994 National Flood Insurance Reform Act Strengthened Mandatory Purchase requirements Flood Mitigation Assistance Program $20 million Strengthened Federal disaster assistance requirement 2003 Introduced Pre-Disaster Mitigation Program $150 million Introduced Flood Map Modernization Program $150 million

12 Policy Growth Linked to Legislation Year Policies N/A 275, million 4.4 million Incentives No flood insurance without mitigation No Federal financial Assistance without flood insurance

13 NFIP Risk Identification Identify Flood Hazards Continuously update risk information Budget Before 2003: $50 million per year 2003, 2004: $150 million per year (est.) : $150 million per year (est.)

14 Impact / Use of Flood Risk Information Risk assessment Insurance rating Mandatory Purchase Requirement Risk communication Risk management / hazard mitigation

15 NFIP and Risk Management Emphasis on loss prevention and loss reduction Assist local governments with Federal mitigation grant programs Successes Post 1993 midwest flooding Savings: $1 billion per year in reduced losses

16 ProVention and the World Bank Purpose Promote the integration of disaster prevention & mitigation into the Bank s development activities International partnership between public & private sectors (ProVention Consortium) DHS/FEMA is a member Recognizes the need to protect the environment Preserve forests, mangroves and coral reefs

17 NFIP An Adaptable Model for Worldwide Risk Management

18 Training, Education, and Technical Assistance Federal assistance to local governments is Essential

19 NFIP Results Risk management Risk prevention modified land use practices Risk reduction safer construction Debt Free NFIP is a financially self-supporting program

20 NFIP Results Debt Free NFIP is a financially self-supporting program

21 Next Phase A greater commitment to risk reduction Protect more properties with flood insurance

22 Conclusion Risk prevention and risk reduction are essential for successful risk management worldwide Parts of the NFIP model may be adaptable in many countries

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