Staying afloat – Flood Risk in Argentina

“My business was flooded five times. In 2012, I was in the shop when the water started to come in. I was standing on the table, the cash register in my hands and my eyes on the merchandise floating around the room. The water inside was almost one meter high. When it began to recede, I realized how severe the damage was. It took me three days to clean everything up. To me, the flood not only meant damaged goods, but also fatigue, extra work, and expended energy.” November 2012 flood in Buenos Aires.

The publication Staying afloat – Flood risk in Argentina, demonstrates that the protection gap for floods in Argentina is large and growing. However, awareness raising as a key factor towards resilience, technological advances, knowledge and tools available to the insurance industry today mean that the creation of a private flood insurance market is a sustainable opportunity.

Over the past 50 years, 75 major flood events have been reported in Argentina, affecting around 13 million people and taking more than 500 lives. With the equivalent of USD 22.5bn lost since 1980, floods are the most costly natural catastrophe affecting the country.
Adjusting for the country‘s GDP growth, the same events today would have caused accumulated losses of USD 43.5bn.

River flooding constitutes a major threat for Argentinians. However, living far from a watercourse is no guarantee against flooding. Some of the worst urban floods in Argentina, such as the 2013 event in La Plata, were a consequence of short but intense downpours triggering what is known as flash flooding.

Today, one in three Argentinians live in areas highly exposed to flooding, amounting to a total of 14.2m people across the country. The estimated economic damage is also extremely severe. Every year, the Argentinian economy can be expected to lose around USD 700m due to flood events, which corresponds to an annual loss of about 0.15% of the country‘s GDP.

Flood insurance: making Argentinians more resilient
Flood insurance represents a substantial business opportunity for insurance providers in Argentina. There are undeniable benefits for all parties involved. With the technological advances and knowledge available to the industry today, there is no reason why insurance cover for flood damage should not be provided. Today, the creation of a private flood insurance market is a sustainable opportunity. Swiss Re is ready to support and collaborate with insurance providers to close the protection gap for flood risk in Argentina.

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