Given the exponential rise in the number and severity of extreme weather events around the globe how will the existing risk transfer mechanisms be affected and what are the implications for commercial property? Learn more: http://www.joneslanglasalle.com/GSP/en-gb/Pages/Global-Sustainability-Perspective.aspx

1. Global Sustainability Perspective
Flood Risk – Response Strategies
April 2014

2. Currently estimated at € 5.5 bn per annum, flood related
property losses in Europe are predicted to increase 8 fold by
2050. While insurance companies rely on historic data to
calculate risk premiums, it is becoming increasingly difficult to
predict how the existing risk transfer mechanisms will be
affected given the exponential rise in the number and severity
of extreme weather events around the globe. What are the
implications for commercial property?
1
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3. 30
1970s
60
1980s
110
1990s
120+
2000 - 2013
Global increase in annual weather-related catastrophe
events 1970 – 2013
Source: JLL Global Sustainability Perspective, April 2014:
SIGMA 2013 - Global Natural Catastrophe Disasters, Swiss Re, March 2014, JLL Analysis

4. Lower Manhattan, New York City:
Lower Manhattan total office stock
101 million sq ft / 9.4 million sq m
Total Losses
1
3
Stock out of operation
one week after Hurricane Sandy
33.6 million sq ft / 3.1 million sq m
US$6
5bn
Insured losses
US$ 30bn
Total economic losses
Evaluating Hurricane Sandy Impact
Source: JLL Global Sustainability Perspective, April 2014
Munich Re, March 2013

5. Of the total estimated property losses, 80%+ are attributable to residential and
some 5% to commercial real estate, with the rest impacting industry, agriculture and transport
Increase
x 8
€5.5bn pa
Flood damage 1970 - 2010
€46bn pa
Flood damage 2050s (estimated)
River flood losses in Europe: historic vs future
Source: JLL Global Sustainability Perspective, April 2014
European Commission, Geneva, 2012

6. Insurance cover
Reinsurance cover
For extreme but low
frequency weather events
Government
rescue schemes
In exceptional cases where
no commercial cover exists
Owner liability
Absorbed by owners
through excess and
capped claims payments
Property flood damage
Through the recovery
of insurance premiums
Indirect transfer to tenants
Absorbed through
loss claims
Property flood damage: risk transfer mechanisms
Source: JLL Global Sustainability Perspective, April 2014

7. COPYRIGHT © JONES LANG LASALLE IP, INC. 2014
For further information contact:
Franz Jenowein
Director, Global Sustainability Perspective
Franz.Jenowein@eu.jll.com
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