Financial management of flood risk

The Organisation for Economic Co-operation and Development (OECD) has supported the development of several strategies for the financial management of natural and man-made disaster risks. The Financial Management of Flood Risk extends this work by applying the lessons from the OECD’s analysis of disaster risk financing practices and the development of its guidance to the specific case of floods.

The key policy messages for the design of a disaster risk financing strategy for flood risk are as follows (p. 132):

• The ability to quantify exposure to flood risk is a prerequisite to the effective financial management of flood risk.
• Government involvement is key in supporting the insurability of flood risk.
• Effective coordination across government is critical for establishing an integrated approach to the financial management of flood risk.