Wetlands Save Millions of Dollars in Flood Damages During U.S. Hurricanes

Over the past decade, the southeast Asian and Japanese tsunamis, along with Hurricanes Katrina, Sandy, and most recently, Matthew, all illustrated the incredibly destructive power of floods even against extensive defensive infrastructure.  SNAPP’s Coastal Defenses Working Group has now released a pioneering study, Coastal Wetlands and Flood Damage Reduction, that quantifies how much protection natural coastal habitats provide during hurricanes.

(ALL INTERNAL AND EXTERNAL USES, NO COMMERCIAL USE) Aerial views of the damage caused by Hurricane Sandy to the New Jersey coast taken during a search and rescue mission by 1-150 Assault Helicopter Battalion, New Jersey Army National Guard, Oct. 30, 2012. PHOTO CREDIT: Master Sgt. Mark C. Olsen/U.S. Air Force
Oct. 30, 2012. Aerial views of the damage caused by Hurricane Sandy to the New Jersey coast taken during a search and rescue mission. PHOTO CREDIT: Master Sgt. Mark C. Olsen/U.S. Air Force


Using the latest property risk modeling techniques, scientists from the conservation, engineering, and insurance sectors studied the impacts of Hurricane Sandy’s storm surges along the United State’s northeastern coastline in 2012. The study found that, where wetlands remained, they reduced the average damage from Sandy by more than 10%: in total, coastal wetlands prevented US$625 million in property damages, $425 million of that in New Jersey alone. Experts within the study team expect that the analyses of the effects of this month’s Hurricane Matthew will demonstrate similar protections.

Wetlands are critical buffers, not just for catastrophic hurricanes but also for all storms in the region. In Ocean County, NJ, the conservation of salt marshes is predicted to reduce average annual coastal property losses by more than 20%.

By quantifying the economic value of natural defenses, they can be more effectively included in risk models and coastal management.  “Modelling has traditionally focused on man-made coastal defense structures, or on other grey architecture solutions, like elevating properties above sea level,” said Paul Wilson, VP of Model Development at RMS and expert in hurricane and storm surge. “This study is pioneering because it applies cutting-edge modelling science to natural defenses, and it allows us to put a financial value on the role wetlands play in protecting our coastal communities against storm surges.”

According to Siddharth Narayan, University of California Santa Cruz (UCSC) Research Fellow, and lead author of the study, even the researchers were surprised by “just how effective wetlands can be at reducing property damages from catastrophic storms and hurricanes. Our coastal habitats are natural defenses, and in this study, we show that their risk reduction services add up to hundreds of millions of dollars along the U.S. East Coast.”

The magnitude of the benefits was unexpected given how many coastal wetlands already have been lost throughout the region. Analysis revealed that even relatively small, thin bands of wetlands serve as an effective first line of defense, and they can be restored to build coastal resilience. Some townships with few wetlands within their borders benefit greatly from wetland preservation in neighboring townships; the value of wetland to properties accumulate as you move upstream away from the coast.

(ALL RIGHTS) April 2013. Project GreenShores is a multi-million dollar habitat restoration and creation project located in Downtown Pensacola, Florida along the urban shoreline of Pensacola Bay. This habitat restoration effort partners FDEP's Ecosystem Restoration Section with the City of Pensacola, Escambia County, the Ecosystem Restoration Support Organization, the EPA Gulf of Mexico Program, the National Fish and Wildlife Foundation, the US Fish and Wildlife Service, NOAA, Gulf Power, local agencies, businesses and volunteers in a community-based effort to restore oyster reef, salt marsh and seagrass habitat within the Pensacola Bay System. Restoring the Pensacola Bay estuary to its historic state stabilizes shorelines and provides essential habitat for wildlife propagation and conservation. Project GreenShores was constructed in phases and consists of two adjacent sites in Pensacola Bay. Site 1 was completed in 2003 and consists of 15 acres of estuarine habitat composed of seven acres of oyster reef and eight acres of salt marsh/seagrass habitat. The seven acres of constructed oyster reef consists of 14,000 tons of Kentucky limestone, 6,000 tons of recycled concrete and 40 wave attenuators. The eight-acre salt marsh incorporated 35,000 cubic yards of sand, 40,000 Spartina alterniflora (smooth cordgrass) plants and 3,900 propagated seedlings of the emergent seagrass Ruppia maritima, also known as widgeon grass. Photo credit: © Erika Nortemann/TNC
April 2013. Project GreenShores is a multi-million dollar habitat restoration and creation project located in Downtown Pensacola, Florida along the urban shoreline of Pensacola Bay. Photo credit: © Erika Nortemann/TNC


The protection provided by coastal wetlands is already incorporated into some industry risk models, but these benefits are often pooled with many other factors and then not clearly recognized by model users, (re)insurers, brokers, clients and others. This study reveals the important of including these protections as a clear and distinct part of the results from risk and engineering models. By measuring and reporting the value of these natural defenses, they can become an integral part of coastal development and habitat restoration decisions.

“This work shows the unlikely yet powerful benefits of collaboration between insurers, engineers and conservationists in identifying solutions to reduce risks to people, property and nature,” said Michael Beck, The Nature Conservancy’s Lead Marine Scientist and SNAPP Coastal Defenses PI. “The work highlights where we can find innovative financing opportunities and incentives for conserving and restoring coastal wetlands, which plainly put is good for the environment and good for business.”

The study was led by the University of California, Santa Cruz; The Nature Conservancy and the Wildlife Conservation Society in association with Risk Management Solutions and Guy Carpenter & Company, LLC. The Science for Nature and People Partnership (SNAPP) Coastal Defenses working group initiated the unique collaboration between coastal engineers, the insurance sector, and conservationists and produced the foundational research which fed into the insurance industry’s risk models. With support from the Lloyd’s Tercentenary Research Foundation, the team was able to take their work to the next level.

“Coastal ecosystems such as coral reefs, mangroves, and salt marshes play a fundamental role in reducing the risk of storm surge,” said Jean-Bernard Crozet, Trustee of Lloyd’s Tercentenary Research Foundation and Head of Underwriting Modelling at MS Amlin. “The LTRF believes that improved quantification of these benefits will, in turn, lead to better management and conservation of these natural ecosystems, contributing not only to risk reduction along our coasts but to our planet’s sustainability in the long run.”


More information about SNAPP Coastal Defenses

Report Factsheet: The Value of Coastal Wetlands for Reducing Property Damage

For access to the full report: Coastal Wetlands and Flood Damage Reduction: Using Risk Industry-based Models to Assess Natural Defenses in the Northeastern USA


About Lloyd’s Tercentenary Research Foundation

Lloyd’s Tercentenary Research Foundation was established to mark the tercentenary of Lloyd’s in 1988. Since then, it has funded over 100 years of academic research in the fields of engineering, science, medicine, business and the environment through the provision of post-doctoral fellowships and business scholarships. Today, through its partnership with the Insurance Intellectual Capital Initiative, UK Research Councils and specifically commissioned academic institutions, Lloyd’s Tercentenary Research Foundation continues its work of funding top flight academic research by supporting new programs of research on risk related issues.


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