Natural coastal habitats, such as mangrove swamps and salt marshes, play a role in mitigating storm-related losses, according to a Swiss Re analysis of Florida’s coastline.
The study found that these natural barriers helped reduce the frequency of insurance claims from lower-severity storms between 2009 and 2022.
Florida has the highest level of coastal property exposure to storm surge in the US. To assess the impact of natural defenses, Swiss Re analyzed flood insurance claims from the National Flood Insurance Program (NFIP) using OpenFEMA data.
The analysis focused on insurance losses paid out for storms up to Category 3 hurricanes, which accounted for a significant share of claims.
Figures from CRESTA revealed that the industry experienced a year dominated by flooding in 2024, with global industry losses from major natural catastrophes totaling US$18.2 billion.
The organization also highlighted that flooding accounted for an unprecedented 78% of the year’s total losses, earning 2024 the designation of “the year of the floods”.
By cross-referencing NFIP claims data with its Biodiversity and Ecosystem Services (BES) Index, Swiss Re examined the risk reduction provided by coral reefs, mangroves, salt marshes, and seagrass meadows. The study compared areas with the highest and lowest levels of natural protection to determine the impact on flood-related insurance claims.
The findings indicate that coastal areas with greater natural protection had significantly lower rates of flood-related insurance claims per month. After adjusting for other flood risk factors, the data showed that claim frequency was reduced by approximately 50% in these areas.
The results align with previous academic research highlighting the role of natural barriers in mitigating storm surge damage.
Swiss Re’s study also noted the financial implications of coastal habitat degradation. One analysis in Florida estimated that coral reef decline could result in an additional $385 million in annual damages from coastal flooding.
For the insurance sector, this underscores the potential value of maintaining and restoring natural coastal defenses.
Swiss Re suggests that insurers can collaborate with local stakeholders to support the preservation of natural habitats, which contribute to property insurability and community resilience.
Insurance solutions may also be structured to indemnify coastal ecosystems, enabling rapid restoration following storm-related damage.
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