A Florida perspective on hurricane resilience and mitigation planning

By Stan Bernard, Head of Financial Institutions and Professional Services, U.S. Middle Market, Zurich North America

This article was originally published in the December 2023 issue of Florida Banking magazine.

Floridians are a very resilient people. Severe weather is no stranger to them, and they are probably better prepared to respond to and recover from natural hazard events than the populations of many other states.

As the devastation caused by Hurricane Ian in 2022 showed, however, no amount of experience in dealing with hurricanes, tropical storms and related flooding can prevent massive damage and even casualties when storms of a certain magnitude hit. Ian was a Category 4 when it hit southwestern Florida, and the resulting catastrophic storm surge, wind damage and other impacts led to over 150 deaths and more than $112 billion in damage.¹ It was not only Florida’s costliest hurricane, but it falls behind only Hurricane Katrina (2005) and Hurricane Harvey (2017) among the costliest in U.S. history.² Strictly seen through an insurance prism, Ian was the second most costly natural hazard event on record.³

According to the National Oceanic and Atmospheric Administration’s ACE (Accumulated Cyclone Energy) Index, cyclones have risen in intensity over the last two decades and 10 of the most active years for hurricanes over the last 70-plus years have occurred since the mid-1990s.⁴ Much of the scientific community sees this as a climate change indicator, as changes in sea surface temperature are tied closely to storm intensity and those temperatures have reached record levels.⁵

So, it’s expected that major storms will become more common in the near future, making living and operating businesses in areas most prone to impacts more difficult and protecting and/or rebuilding property in those areas far more expensive.

The insurance industry is not immune to this trend, as news of some insurers exiting the property market in high-risk states makes clear. Commercial insurance (such as coverage provided by Zurich) has so far been less drastically affected than residential insurance, but no sector has gone untouched. Protecting the larger shared risk pool that allows insurance to work may, unfortunately, require reduced capacity from some providers and rising premiums for many policies.

Disasters increase loan demand, and FEMA and Small Business Administration disaster loans have helped many, but it’s not a long-term solution for properties likely to be impacted by more than one storm. For banks in states like Florida, lending can help offset other weather-related losses for the business, but customers’ capacity for repayment may diminish if they experience multiple disasters. As vital as loans can be in urgent circumstances, they shouldn’t be seen as a substitute for insurance.

There are some steps to helping protect the property insurance market for customers and providers in states like Florida. One is a greater scrutiny on avoidable cost-drivers such as widespread and sometimes frivolous lawsuits against insurers. According to an AP article published last year, Florida accounts for almost 80% percent of U.S. homeowners’ insurance lawsuits but only 9% of all homeowners’ insurance claims across the country.⁶ That’s an imbalance that part of state legislation passed last December seeks to correct.

Still, the most effective path to building greater resiliency amid escalating climate volatility is not risk transfer, but risk mitigation — including looking at what’s working for risk mitigation in states like Florida.

The story of how the Babcock Ranch community came through Hurricane Ian provides a lesson in how innovative thinking and sound planning — well beyond simply meeting required building codes — may make continued occupancy in high-risk areas more viable.

Giant retaining ponds and streets designed to absorb floodwaters helped protect the development’s homes from flooding. Underground power lines prevented high winds from taking out the community’s solar-powered energy supply. These systems and high, storm-focused building standards helped Babcock Ranch emerge from Ian virtually unscathed.⁷

One caveat to this inspiring success story: the development is 30 miles inland. Homes and businesses closer to the coast can certainly benefit from the Babcock Ranch strategy, but rising sea levels will make close proximity to the water increasingly problematic.

Cutting-edge technology and outside-the-box thinking will be needed to maintain Florida’s position as a coveted place in which to live and do business, but above all else, having a sound emergency response plan remains essential for businesses and community developers.

A thorough emergency response plan is too detailed to fully cover here, but here are some key elements to include in mitigation planning:

Pre-storm planning

In advance of hurricane season, a detailed plan for actions to take long before a storm hits should be developed. This plan should include, but not be limited to:

• Verifying needed equipment and supplies are available and in good condition.
• Verifying roofing company contracts and other critical vendor contracts for emergency repairs are up to date.
• Scheduling inspections of building roofs, rooftop equipment, walls, windows and doors.
• Verifying emergency generator testing, fueling and maintenance are current.
• Inspecting and testing any dewatering pumps.
• Verifying shutters and installation hardware are ready and staff is trained for installation.
• Establishing procedures with local authorities for accessing or reentering your site after a hurricane or storm.
• Establishing backup communication procedures for staff and other business operations.
• Determining essential electrical loads for the building and verifying they are connected to an emergency power system.

Addressing wind and water exposures

As the Babcock Ranch example shows, buildings can be designed to withstand many of the impacts of a hurricane — even a Category 4 or 5 event. While high winds can be deadly and devastating on their own, hurricanes really become catastrophic when those winds result in water penetrating a building envelope or compromising its foundation.

Storm surge flooding is especially calamitous when it breaches building entrances, windows and walls. Heavy storm surge flooding can even knock a building off its foundation. There is a wide array of techniques, tools and technology available to reduce the impacts of the “twin terrors” of wind and water. They include, but are not limited to:

• Identifying potential exposures to damage from high winds and water inundation.
• Using a qualified, experienced engineering firm to design seawalls to help protect building foundations and structures from damage caused by waves.
• Following Insurance Institute for Business & Home Safety (IBHS) FORTIFIED Commercial™ construction standards.
• Installing flood gates or flood barrier systems.
• Installing sump pumps to remove water that passes flood barrier systems.
• Relocating fuel pumps outside of tank dikes that can fill with rainwater.
• Designing building walls to resist pressure from waterborne debris.
• Ensuring primary and secondary roof drainage is working up to capacity.
• Housing, rather than simply tying down, rooftop equipment, preventing equipment from exposure to water as well as direct wind loads.
• Following FEMA guidelines for securing lightning rods.
• Arranging satellite dishes so the dish, supports and ballast can be removed and stored in a secure location before a storm hits.
• Protecting cooling towers with equipment screens designed for the wind loads.
• Securing steel decks with screws rather than welds.

Of course, even the best planning and building design does not guarantee your community or structures will fare as well as Babcock Ranch when a major storm hits. A thorough emergency response has four phases and mitigation planning is only the first. The other phases are:

• Preparedness (actions to take 48 hours and 36 hours before a major windstorm)
• Response (actions to take 12 hours before a storm and in the immediate aftermath)
• Recovery (post-storm actions to restore business operations)

All elements of an emergency response plan should be reviewed and updated each year, with the input of risk specialists and the support of management leadership.

Again, this article includes only a brief overview of mitigation actions. To help businesses with all elements of a hurricane emergency response plan, Zurich has a Hurricane Resource Hub, with information provided by the Risk Engineers of Zurich Resilience Solutions and other knowledgeable sources.

Learn about climate risk services available from Zurich Resilience Services.

1. National Hurricane Center. “National Hurricane Center Tropical Cyclone Report: Hurricane Ian.” 3 April 2023.
2. NOAA National Centers for Environmental Information. “Costliest U.S. Tropical Cyclones.” 11 September 2023.
3. Aon. “2023  Weather, Climate  and Catastrophe Insight.” 2023.
4. United States Environmental Protection Agency. “Climate Change Indicators: Tropical Cyclone Activity.” April 2021.
5. Voiland, Adam. “The Ocean Has a Fever.” NASA Earth Observatory. 21 August 2023.
6. Izaguirre, Anthony. “Florida lawmakers set to meet on ailing insurance market.” The Associated Press. 6 December 2022.
7. Neuman, Scott. “One Florida community built to weather hurricanes endured Ian with barely a scratch.” 6 October 2022. All Things Considered (NPR).

Photograph at top by Geostationary Operational Environmental Satellite Program. Image is under the Creative Commons Attribution-Share Alike 4.0 International license.