Flood risk insurance, mitigation and commercial property valuation

Lamond, JE; Bhattacharya-Mis, N; Chan, FKS; Kreibich, H; Montz, B; Proverbs, DG; Wilkinson, S

Flood risk insurance, mitigation and commercial property valuation

Lamond, JE Bhattacharya-Mis, N Chan, FKS Kreibich, H Montz, B Proverbs, DG Wilkinson, S

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Publication Type:: Journal Article
Citation:: Property Management, 2019, 37 (4), pp. 512 - 528
Issue Date:: 2019-08-19

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Field	Value	Language
dc.contributor.author	Lamond, JE	en_US
dc.contributor.author	Bhattacharya-Mis, N	en_US
dc.contributor.author	Chan, FKS	en_US
dc.contributor.author	Kreibich, H	en_US
dc.contributor.author	Montz, B	en_US
dc.contributor.author	Proverbs, DG	en_US
dc.contributor.author	Wilkinson, S https://orcid.org/0000-0001-9266-1858	en_US
dc.date.issued	2019-08-19	en_US
dc.identifier.citation	Property Management, 2019, 37 (4), pp. 512 - 528	en_US
dc.identifier.issn	0263-7472	en_US
dc.identifier.uri	http://hdl.handle.net/10453/133069
dc.description.abstract	© 2019, Emerald Publishing Limited. Purpose: The purpose of this paper is to understand how built environment professionals approach the valuation of flood risk in commercial property markets and whether insurance promotes mitigation in different insurance and risk management regimes, draw common conclusions and highlight opportunities to transfer learning. Design/methodology/approach: An illustrative case study approach involving literature search and 72 interviews with built environment professionals, across five countries in four continents. Findings: Common difficulties arise in availability, reliability and interpretation of risk information, and in evaluating the impact of mitigation. These factors, coupled with the heterogeneous nature of commercial property, lack of transactional data and remote investors, make valuation of risk particularly challenging in the sector. Insurance incentives for risk mitigation are somewhat effective where employed and could be further developed, however, the influence of insurance is hampered by lack of insurance penetration and underinsurance. Research limitations/implications: Further investigation of the means to improve uptake of insurance and to develop insurance incentives for mitigation is recommended. Practical implications: Flood risk is inconsistently reflected in commercial property values leading to lack of mitigation and vulnerability of investments to future flooding. Improvements are needed in: access to adequate risk information; professional skills in valuing risk; guidance on valuation of flood risk; and regulation to ensure adequate consideration of risk and mitigation options. Originality/value: The research addresses a global issue that threatens local, and regional economies through loss of utility, business profitability and commercial property value. It is unique in consulting professionals across international markets.	en_US
dc.relation.ispartof	Property Management	en_US
dc.relation.isbasedon	10.1108/PM-11-2018-0058	en_US
dc.subject.classification	Urban & Regional Planning	en_US
dc.title	Flood risk insurance, mitigation and commercial property valuation	en_US
dc.type	Journal Article
utslib.citation.volume	4	en_US
utslib.citation.volume	37	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
utslib.for	1202 Building	en_US
utslib.for	12 Built Environment and Design	en_US
utslib.for	15 Commerce, Management, Tourism and Services	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/e-Press
pubs.organisational-group	/University of Technology Sydney/Faculty of Design, Architecture and Building
pubs.organisational-group	/University of Technology Sydney/Faculty of Design, Architecture and Building/School of Built Environment
pubs.organisational-group	/University of Technology Sydney/Strength - CCDP - Contemporary Design Practice
utslib.copyright.status	closed_access
pubs.issue	4	en_US
pubs.publication-status	Published	en_US
pubs.volume	37	en_US

Abstract:

© 2019, Emerald Publishing Limited. Purpose: The purpose of this paper is to understand how built environment professionals approach the valuation of flood risk in commercial property markets and whether insurance promotes mitigation in different insurance and risk management regimes, draw common conclusions and highlight opportunities to transfer learning. Design/methodology/approach: An illustrative case study approach involving literature search and 72 interviews with built environment professionals, across five countries in four continents. Findings: Common difficulties arise in availability, reliability and interpretation of risk information, and in evaluating the impact of mitigation. These factors, coupled with the heterogeneous nature of commercial property, lack of transactional data and remote investors, make valuation of risk particularly challenging in the sector. Insurance incentives for risk mitigation are somewhat effective where employed and could be further developed, however, the influence of insurance is hampered by lack of insurance penetration and underinsurance. Research limitations/implications: Further investigation of the means to improve uptake of insurance and to develop insurance incentives for mitigation is recommended. Practical implications: Flood risk is inconsistently reflected in commercial property values leading to lack of mitigation and vulnerability of investments to future flooding. Improvements are needed in: access to adequate risk information; professional skills in valuing risk; guidance on valuation of flood risk; and regulation to ensure adequate consideration of risk and mitigation options. Originality/value: The research addresses a global issue that threatens local, and regional economies through loss of utility, business profitability and commercial property value. It is unique in consulting professionals across international markets.

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http://hdl.handle.net/10453/133069