Flood lessons learned: Build back better in LATAM

The Insured had significant agro-industrial operations and produced a wide range of mass-consumer goods. It had two sites in Latin America which were located close to one another, with each site situated near to separate rivers. A hurricane caused widespread, prolonged and heavy rainfall that burst the banks of the two rivers and flooded both sites.

The force of the floodwater destroyed a perimeter wall and caused damage to the Insured’s buildings. The floodwater reached a depth of 1.5 metres and damaged stock, power plants, boilers, water treatment facilities and various plant and machinery.

The flood stopped commercial operations at both sites, preventing the Insured from distributing the finished goods stored onsite to customers. The Insured managed to re-start commercial production across its operations on both sites within 4 weeks. This was significantly faster than other large commercial operators in the region that had also suffered flood losses due to the hurricane.

Contrary to local market standards, the Insured had implemented a Flood Emergency Response Plan (FERP). This mitigated the loss and highlighted areas where it could have been more robust.

Two weeks following the initial loss, a second hurricane hit, bringing heavy rain and additional flooding. The loss directly attributable to this later flood was minor in comparison to the first flood. However, it demonstrates the potential for significant loss events to happen in quick succession and the value of implementing risk improvement measures quickly.

This case study is an excerpt from our 'Lessons Learned in Floods' publication which was developed in collaboration with Crawford & Company.