Flood Lessons Learned: Lacking mitigation measures in APAC

Insufficient flood risk mitigation measures and response plan impacted a manufacturing company in Southeast Asia, resulting in losses and delay to business resumption.

An international manufacturing business in South East Asia, the Insured's production site sits next to a river with manufacturing, energy production, storage and administrative facilities. 

Following the most significant rainfall event in over two decades, the river next to the Insured's location caused widespread flooding. The flooding also forced the water authority to open a storm gate. Consequently, the flood water damaged stock as well as industrial and office equipment.

The stock damage accounted for more than 55% of the total losses. As the flood rose to its maximum height within hours, it damaged the stock stored at low levels.

Flood water that had entered the premises affected the production areas. The flooding halted all production in the manufacturing facility at a time when the plant was running at full capacity – 24 hours a day and seven days a week. As the Insured was trying to clear a backlog of orders, the loss put it further behind.

The premises had suffered a previous flood in 2014. This loss in 2020 demonstrated that the mitigation measures put in place after the 2014 flood event were insufficient to prevent a second loss. Also, further enhancement of flood risk mitigation is needed.

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