Flood risk on the rise in Brazil

Once considered a natural disaster “safe zone”, Brazil is facing a strong and increasing threat of flooding that places people, infrastructure and business at risk.

The country's deadliest natural disaster on record occurred in January this year, when floods in the southeastern states of Rio de Janeiro and Sao Paulo killed over 800 people and made more than 100,000 people homeless. In terms of overall budget resources, the USD 460 million in aid allocated by the government towards flood recovery was a large sum, however it fell short of the estimated economic losses of USD 1.2 billion.

It is expected that both the occurrence and impact of flooding will increase in Brazil. During the period 1900-2006, floods accounted for 59% of natural disasters and landslides – which are often triggered by heavy rain and flooding – totalled 14%. Since 2000 flooding has caused annual average losses of about USD 250 million and killed almost 120 people per year.

Climate change is likely to increase the frequency and severity of precipitation in the region, and this is a major cause of flooding. And social economic losses will continue to increase due to rapid socio-economic development and an increasing concentration of people and economic activity in urban areas.

Prevention and mitigation options are currently limited and, as the January 2011 floods illustrate, governments are currently not able to cover the full economic cost of the disaster, nor do they address the long-term issues of comprehensive sovereign risk management.

Swiss Re works with governments and public sector entities around the world to develop approaches to risk prevention and financing in regards to natural and catastrophic disasters, employing macrofinance, microfinance and parametric solutions. These seek to bring about integrated disaster management to reduce the costs to government and society, provide swift disaster funding, offer protection to the most vulnerable, and find innovative ways of providing rapid claims payouts.

Published 27 April 2011