Understanding the situation faced by SMEs when they experience flood incidents.
Dr Paola Sakai speaks further about the situation faced by SMEs when they experience flood incidents and the progress of their ongoing project - “Bridging the knowledge gap to boost SME resilience”.
As I mentioned in my previous piece, there is a lack of understanding about the situation faced by SMEs when they experience flood incidents. On the one hand, the economic effects on small businesses, as well as the local and regional communities where they are embedded is not well accounted for. There are many aspects that are not always directly evident, such as disruptions in the supply chain. Aspects like that are called indirect impacts and are rarely considered in economic assessments. Having detailed information on the economic costs of flooding can help to better understand the full impact of flooding events. With this understanding, Local and Regional Authorities could develop more informed economic cases to secure investment to reduce flood risk where is mostly needed. On the other hand, SMEs in flood risk areas need insurance, as well as access to finance in order to expand their activities, get a mortgage, or just continue with their businesses. SMEs are more complex to insure than households or cars (which have more homogeneous traits, e.g. all houses have kitchens), this lack of understanding generates uncertainty, which is reflected in increased insurance premiums, less favourable terms, or policy withdrawals for SMEs in flood risk areas. There is thus a gap in the understanding of SMEs flood risk and their flood risk management strategies, including PFR measures.
Over more than a year, I have been leading a project titled “Bridging the knowledge gap to boost SME resilience”, in partnership with the University of Leeds, the University of York, the Environment Agency, the West Yorkshire Combined Authority, the Leeds City Region Enterprise Partnership, and the Insurance Industry. Our main financial partner was iCASP. This study seeks to address the knowledge gaps that I have just mentioned. It also has developed tools to support SMEs to become more resilient to the impacts of flooding, helping to reduce negative impacts on the wider economy. This project brings together local authorities and the insurance sector to help them improve their understanding of the impacts of flooding on SMEs, identify how they can support the sector to become better prepared for floods, and help prioritise their responses if and when flooding occurs.
We got impactful results from piloting the tools we developed with 135 SMEs and 6 case studies. We will present the results next week at an online policy event on Wednesday 9th June 2021 at 10 AM. During the online event, we will be presenting the written report that contains the account of the study and how we created these tools with local and regional authorities across Yorkshire and the Humber, as well as for lenders, insurers, surveyors, and brokers. You are warmly welcomed to our event. We will discuss, in a positive atmosphere, the challenges in relation to SMEs and flooding, and how we all need to work together to create and use tools to advance flood protection. We have invited representatives from different groups (SMEs, the insurance industry, local / regional / national institutions), who will be giving their views on what they believe are the most compelling issues they face in relation to understanding SMEs and flooding. They will also give their perspectives on the usefulness of the tools that have been developed in this project.
Tickets are limited, and we have already 120 persons registered. Book your place and join us in this relevant event https://www.eventbrite.co.uk/e/146938957377 to help to advance SMEs flood resilience!
I am looking forward to seeing you there!
Dr Paola Sakai