Risk Sharing in Flood Management

Flood Management Tool Series, Technical Document No. 8, Version 2.0 ¦ 2013

Flood managers have traditionally focused on structural interventions that, in the majority of cases have succeeded only in shifting impacts downstream or upstream. Meanwhile, however, the analytical tools for flood risk assessment and risk management practices offer a far greater variety of options. The Tool introduces the topic based on a judicious combination of measures that address risk reduction, risk retention and risk transfer through a strategic mix of structural and non-structural measures for flood preparedness, response and recovery. Risk reduction options also include the questions how the cost of risk reduction measures can be equitably shared in society. It intends to provide a conceptual “bridge” between the classically engineering focused flood management professionals and the sectors specialized in risk management, such as the insurance and re-insurance as well as capital market actors hedging against certain hydro-meteorological risks.
In its second edition, the Tool has been enhanced with recent practices and examples for risk sharing methods including crop insurance, catastrophe risk insurance facility, and index based insurance have been added to provide more options in flood risks sharing as an instrument in managing floods.

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