Navigating the Turn – Flood Risk, Levees, and Insurance

Doug BellomoMay 2011 FEMA | Federal Insurance and Mitigation Administration

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Harvard Business Review

“In the aftermath of the financial crisis, it’s become clear that the executives of many major financial institutions operated with inadequate and distorted information about the value and risks [to] their firms assets. As a result, they failed to anticipate the crisis and reacted slowly and ineffectively when it hit. Perverse incentives, inadequate governance, and weak regulation clearly contributed.”

for “financial crisis” substitute “flood” for “major financial institutions” substitute

“watersheds” for “firms” substitute “community”

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Levees and Flood Risk

Times are tough – Economy Uncertainty - Climate, Finances, Growth

Aging Infrastructure –Levees, Dams, Navigation

Government funds - Shrinking Binary Thinking – Safe/Unsafe, In/Out Population Rising – Demands on Food, Water, Housing, Land

Litigation – Continues (stronger cause and effect)

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Intensity – When it comes to Flood Risk, Levees, Insurance

Loss – money, job, business, property, life

Environmental damage – habitat, water quality, endangered species

Pain and suffering – social vulnerabilities

Loss of Control – What can I do about a flood or a government agency requiring me to do something?

Uncertainty – Inaction or Action

Feelings are REAL

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Reactions to higher risk news…

Make “it” go away – Fix “it”• “it” not well defined (map, flood, FEMA, NFIP,

implication?)

Response - binary thinking overly simplified solutions

Must be wrong - attack the science Talk about rules not risk Avoid – too hard pile – “systems approach” too complicated

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The Context: Nationally and Locally

Social Vulnerabilit

y

Fears Feelings

Challenging Economy

Environmental Concerns

Uncertainty

Facts and Figures

Binary Thinking

Confused and Unstructured

Debate

Risk MAP toward a healthier and balanced discussion…

Products – science/data

Process - focused on mitigation

Empathy - understanding

Next Flood

or LFD ?

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Navigating the Turn

Risk MAP Opportunity and Platform

Creative Thinking and Resolve

Healthier Community

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Harvard Business Review

Operates with adequate clear information about what they value and the risks that threaten

Anticipate crisis and react quickly and effectively

Has the right incentives in place Adequate governance and controls to manage the risk

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Summary

Levees and increased flood hazards spark an intense and an important debate about flood risk – an opportunity• Be the cool head – know the facts work through the

feelings• Broaden the dialog beyond “minimum” requirements to

comprehensive flood risk management• Recognize short term thinking and keep the long term

focus

What’s important – • Raising awareness – what’s possible and what can be

done about it• Constructively move people to actively manage their

flood risk

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Planned and Ongoing Projects