Insurers are among a new coalition advocating policy changes to reduce economic losses from future storms and rising sea levels along U.S. coastlines.
The Resilient Coasts Initiative includes insurers, environmental groups and public officials. Their recommendations, enumerated in a blueprint, include fine-tuning climate risk models, requiring risk-based land use planning, strengthening building code standards to meet future risks, and maintaining a viable private property/casualty insurance market.
"Our coasts are threatened, there are reasonable steps to counter those threats, and we as a nation are not yet taking them," the Resilient Coasts Blueprint states. "Evidence shows we can reduce our risks and our costs by 50% or more."
To buttress this contention, the blueprint cites the example of 500 commercial clients insured by Johnston, R.I.-based FM Global. During Hurricane Katrina, the properties suffered about 85% less damage than similarly situated properties as result of building retrofits and other hurricane loss prevention measures taken by the policyholders.
The $2.5 million investment in loss prevention resulted in $500 million in avoided losses, the coalition says. Likewise, the National Institute of Building Sciences shows that every dollar spent on mitigation saves society about four dollars on recovery costs. Accordingly the blueprint recommends that all U.S. coastal cities and towns implement adequate land use requirements and building codes.
"The Travelers Institute's support of the Resilient Coasts Initiative reflects its deep belief that loss mitigation, strong and well-enforced building codes, and sensible land use planning are critical to reducing risk to life and property as well as to making private insurance more plentiful in coastal areas," Joan Woodward, Travelers EVP of public policy. "Because of the critical nature of its work, the Resilient Coasts Initiative is the first project to receive the support of the newly created Travelers Institute, which was established to participate in public policy dialogue on matters of interest to the insurance marketplace and contribute to solutions on a wide range of issues that face our customers and the communities we serve."
In addition to the Travelers Institute, the blueprint is endorsed by the Nature Conservancy, National Oceanic and Atmospheric Administration, the Wharton School, and the Mayor of Charleston, S.C. and is directed by The Heinz Center and Ceres.
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