Navigating the Turn – Flood Risk, Levees, and Insurance Doug Bellomo May 2011 FEMA | Federal Insurance and Mitigation Administration

2 Harvard Business Review “In the aftermath of the financial crisis, it’s become clear that the executives of many major financial institutions operated with inadequate and distorted information about the value and risks [to] their firms assets. As a result, they failed to anticipate the crisis and reacted slowly and ineffectively when it hit. Perverse incentives, inadequate governance, and weak regulation clearly contributed.”  for “financial crisis” substitute “flood”  for “major financial institutions” substitute “watersheds”  for “firms” substitute “community”

3 Levees and Flood Risk  Times are tough – Economy  Uncertainty - Climate, Finances, Growth  Aging Infrastructure –Levees, Dams, Navigation  Government funds - Shrinking  Binary Thinking – Safe/Unsafe, In/Out  Population Rising – Demands on Food, Water, Housing, Land  Litigation – Continues (stronger cause and effect)

4 Intensity – When it comes to Flood Risk, Levees, Insurance  Loss – money, job, business, property, life  Environmental damage – habitat, water quality, endangered species  Pain and suffering – social vulnerabilities  Loss of Control – What can I do about a flood or a government agency requiring me to do something?  Uncertainty – Inaction or Action Feelings are REAL

5 Reactions to higher risk news…  Make “it” go away – Fix “it” “it” not well defined (map, flood, FEMA, NFIP, implication? )  Response - binary thinking overly simplified solutions  Must be wrong - attack the science  Talk about rules not risk  Avoid – too hard pile – “systems approach” too complicated

6 The Context: Nationally and Locally Social Vulnerability Fears Feelings Challenging Economy Environmental Concerns Uncertainty Facts and Figures Binary Thinking Risk MAP toward a healthier and balanced discussion… Products – science/data Process - focused on mitigation Empathy - understanding Next Flood or LFD ?

7 Navigating the Turn Risk MAP Opportunity and Platform Creative Thinking and Resolve Healthier Community

8 Harvard Business Review  Operates with adequate clear information about what they value and the risks that threaten  Anticipate crisis and react quickly and effectively  Has the right incentives in place  Adequate governance and controls to manage the risk

9 Summary  Levees and increased flood hazards spark an intense and an important debate about flood risk – an opportunity Be the cool head – know the facts work through the feelings Broaden the dialog beyond “minimum” requirements to comprehensive flood risk management Recognize short term thinking and keep the long term focus  What’s important – Raising awareness – what’s possible and what can be done about it Constructively move people to actively manage their flood risk

10 Planned and Ongoing Projects