Flood infrastructure saves 10x rebuilding costs

Climate change is expected to drive up these losses further.

Flood protection infrastructure, such as dykes and flood gates, offers significant financial benefits and can help cost savings of up to ten times compared to post-disaster rebuilding.

The global economic losses from natural catastrophes in 2023 reached an estimated $280b, with $51.6b from floods, according to Swiss Re Institute. 

Climate change is expected to drive up these losses further, particularly as rapid urbanization increases asset values in high-risk zones. 

Swiss Re Institute's research shows that "grey" infrastructure, like dykes and levees, significantly reduces flood damage, with benefits outweighing costs by two to seven times globally, and up to ten times in flood-prone regions.

These structures, when built to optimal standards, can cut flood damage by 60% to 90% in densely populated areas. Nature-based solutions, like barrier islands and vegetation, can be equally effective in less populated areas.

According to Veronica Scotti, Chair of Public Sector Solutions at Swiss Re, investment in climate adaptation, particularly flood preparedness, is crucial for economic stability and public safety. 

However, adaptation projects face chronic underfunding. Scotti emphasises the need for frameworks that attract private capital to support these efforts whilst optimizing public funding. 

“All flood interventions, especially when upgraded and maintained, can benefit both insurers and policyholders,” Swiss Re Institute said in a release.