The private re/insurance sector is ready to tackle rising flood losses: Swiss Re’s Noriega, Wiese

By Luke Gallin

Insurers and reinsurers are ready to meet growing public desire for improved flood coverage as the risk of flooding to communities continues to rise across the globe, according to Swiss Re’s Santiago Noriega and Alexa Wiese.

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Noriega explained that in order to achieve good results the public and private sectors will have to work together, stressing that leveraging the resources of one side will be insufficient to meet the demands of the task at hand.

“There is more to the issue than just providing capacity. We need to get people to realize the true risk of flooding. We need to invest in educating the public. We need to discuss with banks, insurance agents, insurance companies, property owners, banking and insurance regulators in order to raise awareness and ease the process of getting a flood policy.

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“So at Swiss Re one of the things we’re doing is to use behavioral economics to better understand what influences and drives behavior around buying flood insurance. We’re approaching this from a couple of angles. The first is agent education and how to encourage agents to sell a new product like flood while the second is around consumer messaging and how they view and understand their own flood risk.

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“The private insurance industry is ready to step up to fulfil its potential as a source of financial support. When the private market takes more of the risk it eases the burden on local, state and federal government budgets that are already stretched. The collaboration between all the different players in the flood insurance sector will make our society more resilient.”