Floods in Eastern Subtropical Argentina …
53
by Nosetto et al. (2012). The dispersion diagram between the structural flood risk and
the change in net sown area per municipality yields no relevant results (not shown).
Insurance as a Flood Management Policy
It is essential to acknowledge that flood hazard mitigation is a public good, and
that the public sector should coordinate actions aimed at reducing risk exposure and
promoting adaptation. In Argentina, risk management policies have been historically
ineffective in building resilience to natural disasters, and particularly to flood-related
shock (Penning-Rowsell 1996; Latrubesse and Brea 2009; Hurlbert and Gupta 2017).
The observed and projected hydrological changes over ESA, depicted in previous
sections, suggest that without further human intervention, with new and more effective responses to the flood hazard, human vulnerability will only increase in the
future. Increasing resilience to flood hazards should include both structural and
non-structural measures. The former includes measures such as stricter regulations
and monitoring on land use changes, reforestation and restoration of riparian areas,
construction of a resilient transport network, and the development of flood protection barriers, reservoirs and canals for drainage, and pumping systems. Non-structural
measures include the design and implementation of meteorological and hydrological
early warning systems, the identification and classification of flood-prone areas, and
the development of a flood insurance market.
In a context in which most of floodplains are already productively in use or
urbanized, as is the case of most of the urban sites along river banks in ESA, perhaps
the policy that might be most cost-effective in increasing resilience to flood hazards is
insurance. In this regard, the insurance industry in Argentina has very low insurance
penetration for the non-life sector, around 2% of GDP in 2015, in accord with Swiss
Re (2016). Except for the motor sector and global corporations, where insurance
coverage is medium-high, for most other markets flood coverage is either very low
or even nonexistent. Standard residential insurance policies generally do not include
flood coverage, which would have to be requested by the insured as an ad hoc
additional feature. However, very few insurance providers in the country offer this
option. This implies that the cost of floods falls entirely on either the affected people
or the public sector. For instance, in the abovementioned 2013 event in the cities of
La Plata and Buenos Aires, less than 5% of the total damage to households and small
businesses was insured (Swiss Re 2016).
Regarding the agricultural sector, around 18 million hectares is insured throughout
the country, representing almost half of total cropland (Argentine Farming Risk
Office, Federal Government, Web site consulted in 2016). Coverage against flooding
is usually only included in multi-peril policies, which represent less than 2% of
total insurance coverage, implying extremely low flood insurance penetration in the
agricultural sector.
Developing flood insurance markets seems to be a reasonable policy given that
floods do not occur frequently in the same area or over vast extensions of ESA,
53
by Nosetto et al. (2012). The dispersion diagram between the structural flood risk and
the change in net sown area per municipality yields no relevant results (not shown).
Insurance as a Flood Management Policy
It is essential to acknowledge that flood hazard mitigation is a public good, and
that the public sector should coordinate actions aimed at reducing risk exposure and
promoting adaptation. In Argentina, risk management policies have been historically
ineffective in building resilience to natural disasters, and particularly to flood-related
shock (Penning-Rowsell 1996; Latrubesse and Brea 2009; Hurlbert and Gupta 2017).
The observed and projected hydrological changes over ESA, depicted in previous
sections, suggest that without further human intervention, with new and more effective responses to the flood hazard, human vulnerability will only increase in the
future. Increasing resilience to flood hazards should include both structural and
non-structural measures. The former includes measures such as stricter regulations
and monitoring on land use changes, reforestation and restoration of riparian areas,
construction of a resilient transport network, and the development of flood protection barriers, reservoirs and canals for drainage, and pumping systems. Non-structural
measures include the design and implementation of meteorological and hydrological
early warning systems, the identification and classification of flood-prone areas, and
the development of a flood insurance market.
In a context in which most of floodplains are already productively in use or
urbanized, as is the case of most of the urban sites along river banks in ESA, perhaps
the policy that might be most cost-effective in increasing resilience to flood hazards is
insurance. In this regard, the insurance industry in Argentina has very low insurance
penetration for the non-life sector, around 2% of GDP in 2015, in accord with Swiss
Re (2016). Except for the motor sector and global corporations, where insurance
coverage is medium-high, for most other markets flood coverage is either very low
or even nonexistent. Standard residential insurance policies generally do not include
flood coverage, which would have to be requested by the insured as an ad hoc
additional feature. However, very few insurance providers in the country offer this
option. This implies that the cost of floods falls entirely on either the affected people
or the public sector. For instance, in the abovementioned 2013 event in the cities of
La Plata and Buenos Aires, less than 5% of the total damage to households and small
businesses was insured (Swiss Re 2016).
Regarding the agricultural sector, around 18 million hectares is insured throughout
the country, representing almost half of total cropland (Argentine Farming Risk
Office, Federal Government, Web site consulted in 2016). Coverage against flooding
is usually only included in multi-peril policies, which represent less than 2% of
total insurance coverage, implying extremely low flood insurance penetration in the
agricultural sector.
Developing flood insurance markets seems to be a reasonable policy given that
floods do not occur frequently in the same area or over vast extensions of ESA,