Cedric Stephens | Flooding as business risk

The French Geological Society (BSGF) published a research study in 2013 about flooding in Port Maria, St Mary. I found an extract from it while searching for local newspaper reports about this month’s flood.

Professor Michael Taylor, dean of the Faculty of Science and Technology, who co-directs the Climate Studies Group of the Mona Campus at the University of The West Indies, provided the stimulus for me to add my two cents’ worth to the conversation in today’s article. The provocative headline of his opinion piece, ‘Tackling Flooding: We Cannot Keep Doing Things the Same Way’ – with its implicit subtext ‘and expect to get a different result’ – caught my attention.

Climate risks dominate global concerns, according to the World Economic Forum’s Global Risk Report for 2022. The International Monetary Fund’s January 25, 2022, Staff Report for the 2021 Article IV Consultation for Jamaica, identified the “higher frequency and severity of natural disasters related to climate change – that is, more intense, and frequent hurricanes, floods, irregular rainfall, and droughts” in its risk matrix. The fund’s staff assessed the structural and domestic risks associated with these events in an appendix to the report as medium and high, respectively. The latter was described as having the potential to cause “severe damage to infrastructure and agriculture”.

Except for Prof Taylor’s article, none of the newspaper reports examined this year’s February 1 incident in the context of climate change. Don’t our reporters recognise the connection?

INSURANCE AGAINST LOSS OR DAMAGE

One of the articles in the Jamaica Observer spoke to the inability of most business operators in Port Maria to buy insurance against loss or damage caused by floods. The professor, on the other hand, broadened the discussion to include other flood events in New Haven, St Andrew on August 21, 2021, and in Montego Bay three months later. He also offered prescriptions to reduce the risk.

The abstract to the BSGF report, though it focused on Port Maria nearly a decade ago, provided insights into why business owners and operators and householders in that and other flood-prone areas face insurance supply-side problems. Many of Jamaica’s major coastal towns that are sited in low-lying areas near rivers are likely to suffer the same fate as Port Maria. The town is also located in a parish within a ‘high rain zone’.

Flash flooding, from extreme rainfall, is one of the major natural disasters affecting Jamaica and other small island states of the Caribbean, the paper said.

Agents of the geological society analysed the extreme rainfall event that occurred November 23-24 in 2006. That incident took place as the hurricane season was ending. The study showed that the flooding exceeded the 30-year annual rainfall in that area and the 100-year return period as calculated from the 30-year rainfall data for Jamaica.

The probability that events such as floods or other natural disasters will occur is usually expressed as a return period. For example, the return period of a flood might be stated as 100 years. This is otherwise expressed as its probability of occurring being 1/100, or one per cent in any one year.

None of the authors of the February 2022 event used a similar yardstick to measure the probability of the most recent flood.

The Port Maria River, according to the abstract, “lacks a gauging station to monitor flow data and flood-discharge peaks. The town continues to get flooded from intense short-duration rainfall continuing to affect life and property.

Flood plain maps exist for the larger watersheds of the island, but smaller, yet flood-prone ones have not been mapped so far. Hence this becomes very important to create a flood-plain map showing the extent of the run-off from rainfall with respect to the buildings and other infrastructure of the area.

NO-BUILD ZONE FOR LOW-LYING COASTAL AREAS

The present work aims to create a spatial distribution map of the run-off from the rainfall measurements aiding in developing a no-build zone for this and other low-lying coastal areas of Jamaica.

Based on the photograph that accompanied Professor Taylor’s article, it appears that the authorities have done very little to mitigate the risk of flooding during the last several years. What would have been the situation if the February flood event in Port Maria had occurred during the hurricane season? What if two or more hurricanes affected the area during a single season?

Professor Taylor offered six practical ideas to address the problem of flooding using the Port Maria event as a reference. I am eagerly looking forward to hearing from the authorities – particularly from the persons who have portfolio responsibility for climate change – during the upcoming Budget Debate about their action plan to mitigate flooding during the 2022-23 financial year.

Many persons are unaware that while flood insurance in Jamaica is offered by private insurance companies, a similar situation does not exist in the United States. Insurance against losses arising from floods is provided by a US government agency, the National Flood Insurance Program (NFIP), which is managed by the Federal Emergency Management Administration. The protection it offers is delivered to the public by a network of more than 50 insurance companies and NFIP Direct.

Property insurance policies provided by private carriers typically exclude flood damage. The insurance supply side in Port Maria should be viewed in this context. Obviously, I am not authorised to speak on behalf of insurers but if asked to hazard a guess, I would predict that the supply of flood insurance for the island’s coastal towns is likely to decline further over the next few years.

What impact this is likely to have on the tourist industry is an open question given the likelihood of sea-level rise.

Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to aegis@flowja.com or business@gleanerjm.com.