Resilience spending by FEMA has reduced hurricane claims

Pre-disaster resilience spending by the Federal Emergency Management Agency (FEMA) has actively reduced the cost of damages across US counties impacted by hurricanes, according to a new report by AXA XL and the Cambridge Centre for Risk Studies (CCRS).

The research evaluated how effective specific methods of mitigation are in the context of North American hurricanes. 

A comparison of three hurricanes similar in size and path (Charley in 2004, Wilma in 2005 and Ian in 2022) highlights how building codes established after the 2004 event significantly reduced wind damage impact. 

The research underlines how proactive mitigation spending and planning can have positive results.

“Adapting our built environment is especially important.” 

Trevor Maynard, vice chair & director of Systemic Risk at the CCRS, commented: “We are grateful for the support of AXA XL in funding this research which clearly shows that FEMA’s spending on protective infrastructure in advance of disasters reduces damages. In combination with strong building codes, communities can be protected.”

Andrew MacFarlane, head of climate at AXA XL, said: “Adapting our built environment is especially important in the face of a changing climate given the expected impacts of changing frequencies and severities of catastrophic events.”

Jonathan Gale, chief underwriting officer, AXA XL Reinsurance, commented: “Getting families and businesses back on their feet quickly and in a better state is one thing—reducing or avoiding the loss in advance is another and something the re/insurance business is uniquely positioned to help with.”

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