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Insurance Solutions

Formerly Moody’s RMS

In my recent article in Reactions entitled Why Long-term NFIP Reform is a Must, I looked back at the flood events of 2018 through the lens of the need to reform the National Flood Insurance Program (NFIP). I made the argument that the NFIP is not effectively covering communities at risk or supporting the development of a private market that support that same goal.

Looking at Hurricane Florence, its impacts exemplify the type of event from which our communities need to recover from by leveraging the NFIP and a more robust private market. Both North Carolina and South Carolina each broke records for the amount of rainfall caused by a tropical cyclone. While the flooding due to storm surge was significant in areas such as New Bern, the majority of the flood damage was driven by that record rainfall in the inland areas.

The areas most impacted had the lowest take-up rates for flood insurance – the take-up rate for NFIP policies is less than two percent in the inland counties of North Carolina and South Carolina, while take-up rates in most coastal counties generally range from 10 to 25 percent. As a result, RMS analysis found that Florence caused US$3 billion to US$6 billion in uninsured losses, or about 4-5 times the losses expected to be incurred by the NFIP.

 Kopec Reactions
Soldiers use a motor boat to conduct search-and-rescue missions for stranded residents in flooded areas caused by Tropical Storm Florence in Mullins, South Carolina., Sept. 20, 2018. Army National Guard photo by Staff Sgt. Jorge Intriago. The appearance of U.S. Department of Defense (DoD) visual information does not imply or constitute DoD endorsement.

In the article, I suggest that if the heaviest rainfall from Florence had been just 75 miles further north, three times as many residents could have been affected. And the type of rainfall as seen with Florence, seems to be part of a trend. Scientists at the National Center for Atmospheric Research (NCAR) have pointed to increasing temperatures slowing the speed of tropical cyclones and pumping more moisture into those storms, which would result in more tropical cyclone-driven rainfall and resulting flooding.

We should acknowledge and give credit to the progressive actions that FEMA has taken this past year to improve the NFIP, which are clearly a step in the right direction, but it is Congress that must drive a broader set of solutions to create a more sustainable program. The industry is therefore calling upon Congress to take on long-term reform of the NFIP from continued modernization of mapping and rate-setting to incentivizing and funding mitigation efforts, and more. These reforms will create an NFIP that can support effective recovery for homeowners and build resiliency to events like Hurricane Florence over the long-term.

Click here to read the full article in Reactions magazine.

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Emily Grover-Kopec
Emily Grover-Kopec
Vice President and Head of Modeling Solutions, RMS

Emily Grover-Kopec is Vice President and Head of Modeling Solutions at RMS where she is responsible for the solutions and services that drive adoption and additional value around RMS’ data and catastrophe model product suite. She is currently focused on the release of RMS’ U.S. Inland Flood Model solution.

Previously, she has overseen RMS’ business strategy and relationships with reinsurance intermediaries, and focused on the development of strategic relationships and collaborative programs of research with global reinsurers.

Prior to joining RMS in 2006 from Columbia University’s International Research Institute for Climate and Society, her work concentrated on mitigating climate risk in developing countries.

Emily holds B.S. and M.S. degrees in meteorology from the University of Michigan and Penn State University.

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