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Flood risk insurance, mitigation and commercial property valuation

Jessica Elizabeth Lamond (Construction and Property, University of the West of England, Bristol, UK)
Namrata Bhattacharya-Mis (Faculty of Social Science, University of Chester, Chester, UK)
Faith Ka Shun Chan (School of Geographical Sciences, University of Nottingham Ningbo China, Ningbo, China)
Heidi Kreibich (GFZ German Research Centre for Geosciences, Potsdam, Germany)
Burrell Montz (East Carolina University, Greenville, North Carolina, USA)
David G. Proverbs (Birmingham City University, Birmingham, UK)
Sara Wilkinson (School of the Built Environment, University of Technology Sydney, Sydney, Australia)

Property Management

ISSN: 0263-7472

Article publication date: 2 April 2019

Issue publication date: 7 August 2019




The purpose of this paper is to understand how built environment professionals approach the valuation of flood risk in commercial property markets and whether insurance promotes mitigation in different insurance and risk management regimes, draw common conclusions and highlight opportunities to transfer learning.


An illustrative case study approach involving literature search and 72 interviews with built environment professionals, across five countries in four continents.


Common difficulties arise in availability, reliability and interpretation of risk information, and in evaluating the impact of mitigation. These factors, coupled with the heterogeneous nature of commercial property, lack of transactional data and remote investors, make valuation of risk particularly challenging in the sector. Insurance incentives for risk mitigation are somewhat effective where employed and could be further developed, however, the influence of insurance is hampered by lack of insurance penetration and underinsurance.

Research limitations/implications

Further investigation of the means to improve uptake of insurance and to develop insurance incentives for mitigation is recommended.

Practical implications

Flood risk is inconsistently reflected in commercial property values leading to lack of mitigation and vulnerability of investments to future flooding. Improvements are needed in: access to adequate risk information; professional skills in valuing risk; guidance on valuation of flood risk; and regulation to ensure adequate consideration of risk and mitigation options.


The research addresses a global issue that threatens local, and regional economies through loss of utility, business profitability and commercial property value. It is unique in consulting professionals across international markets.



The authors wish to thank RICS Research Trust for providing funding for part of the research work under a defined call for proposals (Project No. 489). This paper presents a more detailed analysis of data collected for the project and reported in: Lamond, J., Bhattacharya-Mis, N., Chan, F.K.S., Kreibich, H., Montz, B.E., Proverbs, D. and Wilkinson, S., 2017. Flood risk mitigation and commercial property advice: An international comparison. In: PITMAN, K. (ed.) RICS Research Report. London: Royal Institution of Chartered Surveyors.


Lamond, J.E., Bhattacharya-Mis, N., Chan, F.K.S., Kreibich, H., Montz, B., Proverbs, D.G. and Wilkinson, S. (2019), "Flood risk insurance, mitigation and commercial property valuation", Property Management, Vol. 37 No. 4, pp. 512-528.



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Copyright © 2019, Emerald Publishing Limited

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