In this piece, we will take a look at 25 countries with the highest flood risk. If you want to skip our introduction to global warming and the catastrophe insurance industry, then take a look at 5 Countries With the Highest Flood Risk.
The threat of flooding has been exacerbated by changes in global temperatures. Floods have devastated countries in Asia and North America, with the latest flood in New York overwhelming a city with some of the biggest infrastructure in the world. However, while floods were restricted to one city in this case, 2022’s floods in Pakistan caused widespread devastation and created a humanitarian crisis that remains unaddressed a year later.
Yet, even as people in Pakistan wait for the government to help with reconstruction efforts, super floods, it appears, might be a regular feature of modern day living. Each mega flood, such as the one that took place in Libya kills thousands of people and displaces even more. The devastation in the African country is particularly striking since while roughly two thousand people were estimated to have died in Pakistan, the Libyan death toll sits at nearly twenty thousand lives lost – an occurrence also fueled by the failure of two dams that were expected to protect 90,000 people according to the Associated Press. However, recovery from such large scale events takes years and is often complicated by corruption and misgovernance in the countries that might suffer from their consequences.
As an example, a year after the devastating flood and $200 million in U.S. aid, more than 1.5 million children in Pakistan are still at risk of severe malnutrition. Foreign aid to developing countries is often siphoned off or spent inefficiently, and in Pakistan’s case, the money spent on reconstruction and rehabilitation for the flood victims appears to have had a negligible impact on feeding those who need food the most. This is because data from the United Nations Children’s Foundation (UNICEF) shows that at the outset of the devastating humanitarian crisis, 1.6 million children were severely malnourished, so after a year, more than 93% of them are still suffering.
These megascale human disasters are caused by climate change and are part of the broader phenomenon of global warming that is a result of the stunning growth in the use of carbon based fuels for industrial growth. According to the National Aeronautics and Space Administration (NASA), a lunar cycle coupled with elevated sea levels due to global warming will cause every major U.S. coast to experience high tide floods from 2023 onwards. Global warming causes the glacier ice caps to melt, and the water then flows into the sea at sufficiently large levels to cause floods. However, since temperatures are now higher, less water is frozen back, leading to a disruption in the delicate balance of the Earth’s ecosystem.
Disasters such as the floods in New York also complicate operations for the insurance industry. The U.S. has a large insurance industry, and events such as tornadoes and hurricanes, often see insurers take out coverage to protect them from financial losses in case of a natural disaster. However, insurance companies, like the planet’s water system, delicately balance their portfolios to account for potential payments, and if natural disasters increase, then some firms can also go out of business if they are unable to meet all claims coverage. For instance, Floridan insurance company United Property & Casualty Insurance (UPCI), a subsidiary of American Coastal Insurance Corporation (NASDAQ:ACIC), was unable to weather the storm left by Hurricane Ian in September 2022. The insurance company had expected $660 million in losses from the catastrophe that saw roads flooded with water, but in reality, the bill stood at $864 million. As a result, the firm disclosed insolvency and took the appropriate steps to inform regulators.
In case of insolvency, an insurance company turns to a reinsurance company which then takes the responsibility for excess losses that the original insurer is unable to compensate for. And as you’ll find out below when you look at the losses from the hurricanes below, they can often range in hundreds of billions of dollars. So, it isn’t surprising either that the reinsurance market was worth $574 billion in 2022 and is slated to grow to $895 billion by 2027 end. We took a look at the biggest companies in this multi billion dollar market and found that the biggest firms were the Munich Reinsurance Company, Swiss Re AG (OTCMKTS:SSREY), and Hannover Rück SE. Some big American reinsurance names are Reinsurance Group of America, Incorporated (NYSE:RGA), Everest Re Group, Ltd. (NYSE:RE), and PartnerRe Ltd. (NYSE:PRE-PJ).
UPCI’s bankruptcy was not the only insolvency due to a natural disaster since another insurance firm, FedNat Holding had filed for bankruptcy in December 2022 due to larger than usual storms hitting U.S. coastal areas. These events have also prompted Flordia’s state government to increase the funds that will be available to casualty insurance companies in case of events that have started to occur more frequently and grown in intensity due to global warming. The Florida legislature passed a bill in December to authorize a $1 billion reinsurance fund aimed at helping insurance companies deal with massive losses. Gauging the losses faced by Florida from Hurricane Ian and Hurrican Idalia in August 2023, this fund might need to be increased, as estimates from UBS show that total insured losses from Idalia could range from anywhere between $4 billion to a whopping $25 billion. Oh, and if you were thinking that $25 billion is a large figure, consider an estimate from the National Hurricane Center that estimates that the total damages from Ian were an unbelievable $112 billion.
Naturally, the scale of these damages is the biggest crisis facing the catastrophe insurance industry, especially if another NASA report turns out to be accurate in predicting that global warming will make hurricanes cause more rainfall and strong coastal floods. If you’re interested in investing in insurance companies, we took a look at the 10 Best Property & Casualty Insurance Stocks to Buy out of which the top three picks were Chubb Limited (NYSE:CB), The Allstate Corporation (NYSE:ALL), and Berkshire Hathaway Inc. (NYSE:BRK-B).
So, if you’re wondering which countries are at the greatest risk of flooding, then read below to find out.
Pixabay/Public Domain
Our Methodology
To compile our list of the countries with the highest flood risk, we used research published in Nature from the World Bank, the University College of London, and other organizations that looked at the flood exposure of 188 countries to see which faced the greatest risk of floods.
25 Countries With the Highest Flood Risk
25. Slovak Republic
Percentage of Population Exposed to Flood Risk: 26.7%
Slovakia is a landlocked Central European country that sees vast amounts of water discharge from its rivers in spring due to mountain snow melting. It has high levels of human development and a GDP per capita of $23,457.
24. Republic of Croatia
Percentage of Population Exposed to Flood Risk: 26.9%
Croatia is a Central European country that saw some of the heaviest flooding on record in May due to excessive rainfall.
23. Republic of Indonesia
Percentage of Population Exposed to Flood Risk: 27%
Indonesia is particularly vulnerable to flooding since it is made up of thousands of islands. It reported severe flooding in January 2023 that saw landslides and led to damage.
22. Republic of Chad
Percentage of Population Exposed to Flood Risk: 27.4%
Chad is a landlocked African country. Like Pakistan, it faced historic flooding in 2022 that broke multi decade records.
21. People’s Republic of China
Percentage of Population Exposed to Flood Risk: 27.5%
China is the second most populous nation in the world which also makes flooding quite serious since large numbers of people are exposed to disaster. Chinese cities broke records for high rainfall that had been present for more than a century in September 2023.
20. Republic of Albania
Percentage of Population Exposed to Flood Risk: 27.6%
Albania is a European country that is one of the most vulnerable regions to climate change according to a 2020 report.
19. Republic of India
Percentage of Population Exposed to Flood Risk: 27.7%
India is the most populous country in the world, and it is searching for more than 100 people these days after a glacial lake burst that had been predicted for years.
18. Republic of Austria
Percentage of Population Exposed to Flood Risk: 27.8%
Austria is a landlocked European country but that hasn’t protected it from historic floods in Europe this year that broke 100 year river levels in Austria.
17. Japan
Percentage of Population Exposed to Flood Risk: 28.7%
Japan is a global economic power and hurricanes and floods have already caused a major disaster in the country due to the Fukushima nuclear power plant.
16. Republic of the Philippines
Percentage of Population Exposed to Flood Risk: 29.0%
The Philippines is another unique country since it is made of thousands of islands as well. Like China, it was hit by Typhoon Doksuri earlier this year for significant damages.
15. Republic of the Congo
Percentage of Population Exposed to Flood Risk: 29.3%
The Republic of the Congo is an African country that has a $14.4 billion economy and a GDP per capita of $2,945.
14. Federal Democratic Republic of Nepal
Percentage of Population Exposed to Flood Risk: 29.4%
Nepal is an Asian country that saw dozens of people killed or go missing in June due to the seasonal monsoon rains.
13. Islamic Republic of Pakistan
Percentage of Population Exposed to Flood Risk: 31.1%
Pakistan is one of the most populous countries in the world, and just like China, this also leaves it vulnerable to widespread devastation from floods.
12. Republic of South Sudan
Percentage of Population Exposed to Flood Risk: 32.5%
South Sudan is a relatively young country that gained independence in 2011. The country has faced floods for years that have left more than half of it submerged.
11. Kingdom of Thailand
Percentage of Population Exposed to Flood Risk: 33.9%
Thailand is a South Asian country that is bordered by both the ocean and the sea. The country regularly sees floods in the monsoon season.
10. State of Iraq
Percentage of Population Exposed to Flood Risk: 36.8%
Iraq is one of the driest countries in the world due to its geographic location. However, the country is ill equipped to deal with flash floods from high rains as was the case in April 2023.
9. Republic of Suriname
Percentage of Population Exposed to Flood Risk: 37.7%
Suriname is a South American nation that touches the Atlantic Ocean. It faced serious flooding in March 2022 as it saw incessant rains due to changing weather patterns.
8. Co-operative Republic of Guyana
Percentage of Population Exposed to Flood Risk: 37.9%
Guyana is a South American country that also borders the Atlantic Ocean. This also leaves it vulnerable to the same weather patterns as Suriname.
7. Kingdom of Cambodia
Percentage of Population Exposed to Flood Risk: 38.1%
Cambodia is a Southeast Asian country that touches the Gulf of Thailand. Flooding in the country has left its protected forests quite vulnerable, adding further insult to injury.
6. Lao People’s Democratic Republic
Percentage of Population Exposed to Flood Risk: 39.7%
Laos borders Cambodia and heavy rain in August saw thousands of families suffer as their villages were flooded and river embankments collapsed.
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Disclosure: None. 25 Countries With the Highest Flood Risk is originally published on Insider Monkey.