If the deadly 1927 Great Mississippi Flood were to recur today, its economic destruction could hit $160 billion, a catastrophe modeling firm projects.

The study, conducted Newark, Calif.-based Risk Management Solutions and published on the 80th anniversary of the largest flood disaster in U.S. history, estimates that the losses would be between $130 and $160 billion.

According to the firm, almost two-thirds of this total would be a result of residential damage, and the other third would result from damage to commercial and industrial properties. While there would be some damage to all the states along the lower Mississippi River, Louisiana would sustain nearly 40 percent of the total loss.

RMS said that although the extreme river flows that created the epic Mississippi flood are rare events, its research suggests that climate change and global warming are already increasing the potential for exceptional flows on great river basins, such as the Mississippi.

This potential for increased flows, RMS said, has an impact on how flood risk should be managed and how levees need to be maintained and strengthened.

Robert Muir-Wood, chief research officer at RMS, warned that while levees have been built stronger and higher since 1927, "the bed of the Mississippi River has also risen in many places."

Mr. Muir-Wood noted, "With stronger levees there should be fewer failures, but as we saw in New Orleans after Hurricane Katrina, relatively short sections of levee failure can have truly catastrophic consequences: the taller the levee, the greater the speed and force of the flooding."

Currently, the report said, there are 220,000 National Flood Insurance Program policies covering $37 billion in exposure across the 100 counties affected by the 1927 flood, representing about 16 percent of the total exposure value.

In the event of a repeat of this catastrophe, around 84 percent of the loss would be outside the terms of insurance. This is a higher dollar amount of uninsured loss than in Hurricane Katrina, according to the study.

The modeling firm said it is likely that private insurers would face significant pressure to pay part of the flood loss under the terms of fire insurance coverage, and they could be confronted with lawsuits claiming that damage was caused by levee failure, debris damage or contamination, rather than simply flood inundation.

RMS also imagines there would be significant political fallout from a disaster of this magnitude in the lower Midwestern states, as the majority of the people who live in the affected area would be forced to relocate or live in temporary accommodations.

Two hundred and fifty persons died in the 1927 flood, which poured through parts of Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri and Tennessee, and it caused approximately $250 to $350 million in loss at the time.

According to RMS data, approximately 27,000 square miles were left underwater, ruining crops, damaging or destroying 137,000 buildings, and causing 700,000 people to be displaced from their homes.

Patricia Grossi, senior RMS researcher, said as a result of economic and social changes that have occurred along the Mississippi River since 1927, "a modern-day event would not be just a regional economic catastrophe but a national disaster."

T he full report is online at http://www.rms.com/Publications/1927_MississippiFlood.pdf

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