Evolution of flood risks in Brazil
The southern Brazilian state of Rio Grande do Sul has recently been grappling with devastating floods caused by heavy rainfall. These floods have resulted in significant loss of life and widespread destruction, leaving hundreds of towns submerged and forcing thousands of people to evacuate their homes. As of July 11, there are at least 179 reported deaths and 34 individuals still missing. The state's civil defence agency has declared this to be the fourth environmental disaster in the last 12 months, following the floods of 2023.
The torrential rain events, which have been occurring since late April, have affected more than 2.3 million people in 475 municipalities. The severity of the floods is unprecedented, as the 2024 event exceeded the 1941 flood, with the Guaiba River rising 5.3 meters above its normal levels, compared to the recorded 4.73 meters in 1941.
Questions are now being asked by state officials regarding the cause of such extreme weather events. Are these floods merely a result of localized variations in weather patterns, or do they signify a larger trend of climate change? Understanding the underlying factors behind these floods is crucial for developing effective strategies for flood risk management.
GC Risk Scores
At Guy Carpenter, we have recently developed a set of products called GC Risk Ratings, which quantify flood risk at high resolution (30m) across the entire globe. This crucially includes future climate scenarios, which help to determine how the flood risk is impacted by different levels of warming.
By aggregating the future scenarios risk ratings at state resolution and comparing with the baseline scenario, we found that the states of Santa Catarina and Rio Grande do Sul are both likely to see the largest increase in flood risk in both the short term (1.5 °C warming scenario compared to pre-industrial) and the long term (3 °C warming scenario compared to pre-industrial) compared to the rest of Brazil.
Figure 1: Predicted change in flood risk using GC Risk Rating
Our findings agree with precipitation projections from IPCC (Intergovernmental Panel on Climate Change), where both total and maximum precipitation are projected to considerably increase (see Figure 2 below) in correspondence of the 2 Brazilian states.
Figure 2: Predicted percentage of change in total and maximum precipitation from baseline for different warming scenarios. Green–precipitation increase, Brown–precipitation decrease. Source: Intergovernmental Panel on Climate Change
In conclusion, the GC Risk Rating products predict that the increased flood risk in the Southern States of Brazil is likely to persist and perhaps increase as global temperatures increase.
How Guy Carpenter can help
As a leading risk and reinsurance intermediary, Guy Carpenter is well-positioned to support the market in addressing extreme weather challenges. Our GC Risk Ratings offer comprehensive flood risk assessment, providing valuable insights for insurers and reinsurers. By leveraging advanced analytics and modeling capabilities, we identify high-risk areas, develop tailored risk management strategies, and design innovative insurance products.
In addition to these capabilities, we are proud to announce the launch of a pioneering probabilistic flood model in Brazil. This model revolutionizes flood risk management by providing a probabilistic approach to understanding and quantifying flood risk. With this groundbreaking initiative, Guy Carpenter continues to lead the way in addressing flood risk and supporting the resilience of the Brazilian market.