Hurricane Florence: Building resilience for the new normal April 2019 Contents Foreword 2 An improved and consistent approach is needed to address large concentrations of Executive summary 4 harmful waste located in high hazard areas 23 Section I: The Physical Context 6 Floods contribute to marginalizing vulnerable communities in multiple ways 23 Previous events: Flooding timeline in North Carolina 8 Climate has visibly changed, sea levels have visibly risen, and these Hurricane threat – Can a Category 1 storm trends are likely to continue 23 be more dangerous than a Category 4? 9 Economic motivators can be used as Section II: Socio-Economic levers for both action and inaction 23 Disaster Landscape 10 The Saffir-Simpson Scale is not sufficient Physical Landscape 11 to charaterize potential hurricane impacts 25 Understanding the Risk Landscape 13 Even the best data has limitations and can’t substitute for caution and common sense 25 Socio-Economic Landscape 13 Recovery after Recovery 13 Section V: Recommendations 26 Environmental Risk 14 Now is the time to act – failure to do so will be far more expensive in the long run 27 Coastal Development 15 We need to critically assess where we are Section III: What Happened? 16 building and how we are incentivizing risk 27 Response 17 Shifting from siloed interventions to a holistic approach is key 27 Recovery 17 Change how we communicate risk 27 Section IV: Key Insights 20 Insurance is vital, but it needs to be the Lived experience, even repeat experience, right type of insurance and it should be doesn’t make people take action 21 a last resort 28 As a Nation, we continue to Imagine how bad it could be and plan support high-risk investments and for worse 28 unsustainable development 21 Section VI: Ways Forward 30 Hurricane Florence: Building resilience for the new normal 1 Foreword 2 Hurricane Florence: Building resilience for the new normal When people live through a catastrophic event their experience becomes a milestone moment that colors everything moving forward. However, the intense colors, so clear directly in the aftermath, soon fade. Many of the people interviewed for this review We also revisit Charleston, South Carolina, expressed the feeling that what happened where we conducted a study of the floods in during Florence was an anomaly. That it is 2015. In the past three years, the Charleston unlikely to happen again. This sentiment is not tri-county region has taken action, from siloed unique to North Carolinians. From Southern efforts to building the networks needed for Germany to South Carolina, from Naples, Italy collaborative action. These and other examples to Nepal, and now in North Carolina, we find of embracing and acting in response to people view “their” storm as unique. challenges and change blaze a trail for the rest of the nation. This new study on Florence is our 14th post-event review of flooding events. We focus We encourage those reading this report to act on floods because they affect more people on what they read. Zurich itself is taking a direct globally than any other natural hazard – recommendation from this and many other 250 million people each year. We focus on post-event reviews which call for greater clarity opportunities and successes and what we can and understanding of insurance offerings learn from these events to help people in North available to mitigate losses from severe weather Carolina and elsewhere avoid or reduce losses. events and include options for building We thank everyone who took the time to resilience. With the release of this review, we engage with us for their hospitality, and their are developing a new training program for the generosity in sharing everything they learned insurance community that will educate brokers from this disastrous event. and customers on the methodology used to complete these post-event reviews, as well as In my role as chief claims officer for Zurich explain the types of insurance offerings and North America and 30 years helping customers resilience measures available to businesses. resolve insurance claims, I’ve seen firsthand how resilient people and businesses can be We live in a fast-paced world – one that seems – able to overcome and persevere through to move faster every day. It is easy to confront some of the most devastating experiences. the next challenge without taking a step back to However, it usually takes a trailblazer to insist examine what can be learned from prior events. on change and build back better or develop This is why this review and the many others something innovative and new. conducted over the years are so important. After a disaster is an opportune time to keep We are proud to feature several trailblazers in our sights on resilience. this report including Captain Terry Bragg, a retired navy captain and the executive director Best regards, of the Battleship North Carolina, the State’s living memorial to their WWII veterans and the Paul Lavelle 11,000 North Carolinians who gave their lives Chief Claims Officer during World War II. Captain Bragg has Zurich North America launched a campaign to preserve the battleship in an innovative way that focuses on living with water instead of fighting against it. Hurricane Florence: Building resilience for the new normal 3 Executive Summary 4 Hurricane Florence: Building resilience for the new normal On September 14th, 2018 Hurricane Florence made landfall near Wrightsville Beach, North Carolina as a category 1 hurricane. Florence’s extremely slow progression inland, coupled with its status as the wettest tropical storm to hit the Carolinas, resulted in catastrophic flooding. The storm, together with riverine flooding and On a more technical level, we still find that storm surge caused over 50 fatalities1, adequate hazard mapping, identifying and KEY TAKEAWAYS approximately 2,600 rescues, and 15,000 managing risk through exposure and • Weather events are changing in nature 2 people to seek emergency shelter . vulnerability control, communicating possible as climate has visibly changed and sea The storm resulted in an estimated USD $17 consequences as early warning messages, and levels have visibility risen billion in damages to residences, businesses and getting stakeholders to take the right and industry in North Carolina3. Like Hurricane timely action are challenging. Not everyone • Economic motivators can be used as Matthew in 2016 and Hurricane Floyd in 1999, evacuated when they should have, others did levers for both action and inaction the flooding from Hurricane Florence pushed not take adequate precautions to limit losses • Floods contribute to marginalizing the region to its breaking point, highlighting and consequences, and many failed to vulnerable communities both where people had learned from prior understand the consequences that Florence storms and where challenges remain. would bring. In part, explaining how dangerous • The Saffir-Simpson Scale is not sufficient storms can be only by identifying the wind force to explain hurricane consequences This study, written in collaboration by Zurich using the Saffir-Simpson-Scale is missing the North America, the Zurich Flood Resilience flood threat that such storms bring more often • Shift from siloed interventions to a 4 Alliance, and ISET-International , looks in detail and more intensely. holistic approach at the floods and their consequences that resulted from Hurricane Florence in North The key insights and recommendations outlined • Now is the time to act on building in Carolina. Based on interviews with impacted in this report are part of a wider series of community-level resilience households and businesses, and with people post-event reviews, using the Post Event Review • Critically assess where all stakeholders involved in risk reduction, response and Capability (PERC) methodology, that the Zurich chose to build recovery at the city, county and state level, as Flood Resilience Alliance has been conducting well as researchers and those within the since 2013. The trends are clear – impacts from • Insurance plays an important role in nonprofit sector, the study identifies lessons disasters are getting worse. After a disaster resilience learned from Florence and provides tangible there is rarely the time to learn what happened recommendations for enhancing flood and what could be done better in the future. resilience, which we believe can be applied to However, the recovery period is also a key communities around the world that are window of opportunity to take action to reduce exposed to flood risk. future risk. The PERC methodology (publicly PERC METHODOLOGY available at: floodresilience.net/PERC) helps • Pre-event context Our key findings revolve around a variety of meet this urgent need. PERCs generate • Analyze the event human, social, economical and political themes. actionable recommendations for reducing • Post-event context based on in-person Society continues to support and subsidize future damages right when they are needed field interviews investment and unprotected development in most5. The aim is to answer questions related to high-risk areas such as exposed coasts and river various aspects of flood resilience, including inlets. Insurance that does not accurately price flood risk management, catastrophe for risk exacerbates the problem. The intervention and recovery. It looks at what has consequences of Hurricane Florence themselves worked well, shares best practices, and were exacerbated by secondary failures and identifies opportunities where there is room for losses beyond the immediate property losses, further improvements. This report follows 13 such as outflow and subsequent contamination PERC studies conducted over the past five years 1 The Washington Post, March 21, 2019 “Florence and of the environment by harmful human, and adds to the global insights gathered from Michael permanently retired from list of Atlantic agricultural and industrial waste. These previous big flood events. It also complements hurricane names.” Brian McNoldy. problems are technologically solved but are not 2 CNN, September 18, 2018.