Floods effects greatly underestimated

I know it's a press release, but it's still a worthwhile point, from insurer Allianz: Hardly any region in the world is safe from floods. One need only think of Mississippi River floods in April and May 2001 causing record losses in the billions of dollars. Or the rushing masses of water that enveloped parts of southern China and Pakistan earlier in the year or Thailand right now.

Nonetheless, people often underestimate the destructive power of water, as the latest Allianz Risk Pulse shows. "Risk awareness of natural catastrophes is not sufficient. This also means that people often do not take enough precautions," says Clement B. Booth, member of the Allianz SE Board of Management

Flooding is the most commonly occurring natural catastrophe in the world. In 2010, the international disaster database EM-DAT counted roughly 400 natural catastrophes with at least 100 people affected or 10 deaths. Nearly half of those catastrophes were floods (182 cases), affecting some 179 million people all over the world. The causes were mostly man-made: whether through climate change or massive interference in the natural flow of rivers and flood plains greatly aggravated flood risks.

"More and more natural drainage areas are being sealed off, for instance by road-building. On top of that, ever more housing developments are going in near rivers. Both of these factors add up to floods with massive economic and humanitarian effects," says Markus Stowasser, an expert on the Cat Research & Development Team at Allianz SE Reinsurance.

People are still very reluctant to invest in prevention. As a result, floods cause not only a lot of damage to buildings but also to the objects in them. And damage is not just limited to river-front property. Heavy rains can result in flooding everywhere...