Floods and heavy storms can cause severe damage to physical assets, both private and public. Take the Atlantic hurricane season we are currently witnessing. It is one of the worst in years, by various meteorological standards. The same holds for the expected costs. Preliminary estimates by rating agencies and reinsurers put it in the triple-digit billions of US dollars.
Hurricane Harvey alone could require up to 180 billion, which would make it more costly than Hurricane Katrina in 2005 that cost 160 billion in today’s US dollars, by official estimates. Other events, such as droughts or other, more permanent regional changes in climate, can have a devastating impact on crop yields and impair the productivity of the agricultural sector and related industries.