Flood disasters cause major destruction to commercial properties, disrupting commerce and impeding a community’s ability to recover from flood events. Without flood insurance, business recovery can be costly and difficult: approximately 25 percent of businesses forced to close after destructive events such as floods never reopen. There is a significant need to raise business owners’ awareness of their flood risk and to provide education on commercial flood insurance options to increase the number of insured businesses. To address these needs, the Department of Homeland Security (DHS) Science and Technology Directorate’s (S&T) National Conversation on Homeland Security Technology is focused on gathering stakeholder insights to identify flood risk and insurance information, along with tools to build more resilient communities.
This past June, the National Conversation held its second in-person engagement of the year, the Commercial Flood Insurance Roundtable, in support of DHS S&T’s Flood Apex program. The roundtable gathered information from a diverse group of commercial flood experts and practitioners to identify decision support tools, research and development investments, and data solutions to meet the Flood Apex’s program objective of reducing uninsured commercial losses and building resilient communities.
Fourteen participants attended the Commercial Flood Insurance Roundtable, including: representatives from the insurance, mortgage lending and real estate industries; community leaders; and business owners who have been directly affected by a flood event. S&T’s First Responders Group (FRG) hosted the meeting, which also included the Federal Emergency Management Agency’s (FEMA) Federal Insurance and Mitigation Administration (FIMA).
After showing a short video overview of the Flood Apex program, FRG Director Dan Cotter and FIMA Deputy Assistant Administrator Paul Huang discussed the S&T/FIMA research partnership. The roundtable discussion included multiple components. First, information was shared about the current state of commercial flood insurance, including known challenges. Next, community leaders and business owners from Washington, DC, Ellicott City, Maryland, and New Orleans, Louisiana, discussed their individual experiences with flood events and how those events adversely affected businesses in their respective communities. Finally, participants discussed potential technology or data solutions that could help business owners better understand their risk and encourage greater uptake of insurance.
Participants focused on questions such as:
- How is flood insurance sold and communicated to businesses? How can this be improved?
- What can be done to help business owners better understand their risk, assess potential loss and make informed decisions about flood insurance?
- What technology and data could be leveraged to improve insurance rate-making and reduce insurance costs?
- What challenges do businesses and communities face when implementing these solutions?
The group identified a variety of potential solutions to address business flood insurance challenges, including:
- Developing tools and technologies that help business owners more clearly understand their flood risk, such as a one-stop shop “Consumer Portal;”
- Enhancing flood risk analysis and hydrological models with better data to understand flood risk, help insurance agents accurately rate policies, and encourage mitigation efforts;
- Tailoring communication and public outreach strategies to large and small business owners to improve awareness of insurance options; and
- Understanding and using behavioral science when developing outreach strategies and technology solutions.
According to Cotter, “The Roundtable served as an important forum for understanding the flood insurance issues that businesses face and potential solutions. Information from this event will be very useful for informing the Flood Apex program’s efforts to develop strategies and tools to help businesses better understand their risk and increase the purchase of insurance for flood-prone businesses.”
The Commercial Flood Insurance Roundtable was just the second of several engagements the National Conversation is hosting in 2017 to support the Flood Apex program’s objectives. The National Conversation is planning additional stakeholder engagement activities to address risk reduction for infrastructure, as well as discuss potential solutions to help individuals and communities more effectively implement mitigation investments. Information gathered from these roundtables will help inform the Flood Apex Program’s future R&D investment priorities.
For more information on past and upcoming events, please visit the National Conversation’s online Collaboration Community. You can also use the Collaboration Community to add to the discussion and pose any questions you may have about commercial flood insurance and other flood resilience issues. Everyone is encouraged to participate!