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Navigating natural catastrophe claims: lessons learned from recent flooding

Natural catastrophes, such as the severe flooding in Spain, Dubai, and Brazil, have been significant drivers of insurance claims for multinational organisations of late.
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By Adrian Sargent , 

Global Multinational Claims leader

03/10/2025 · 3 minute read

Natural catastrophes, such as the severe flooding in Spain, Dubai, and Brazil, have been significant drivers of insurance claims for multinational organisations of late.

Importance of on-the-ground claims support after a natural disaster

Natural catastrophes, such as the severe flooding in Spain, Dubai, and Brazil, have been significant drivers of insurance claims for multinational organisations of late.

With data indicating that both the frequency and severity of natural catastrophes are on the rise, these events have provided valuable learnings, highlighting the need for well-structured global insurance programmes with accurately declared values and risk management processes in place.

Importance of on-the-ground claims support after a natural disaster

Organisations were caught off guard by the flooding last November in the Spanish coastal city of Valencia. Parts of the city received a year’s worth of rain in just eight hours, with devastating consequences. It appears that the volume of rain coupled with a lack of effective emergency response plans left many companies ill-equipped to handle the crisis.

Furthermore, the insurance claims process for the flood-related losses has been highly challenging. The floods triggered Spain’s state-run insurance scheme, the Consorcio de Compensación de Seguros (CCS), which covers extraordinary risks (including natural catastrophe events) in Spain. The CCS insurance scheme has some unique coverage considerations that should be noted. For example, under the CCS, the deductible is 7% of the loss. This provision could result in a significant financial impact for insureds.

In the wake of the Valencia flooding, risk managers have been reminded of the importance of devising and practising emergency response plans and implementing other business resilience measures. The fraught claims process has highlighted the need for on-the-ground support following a disaster from experts who speak the local language and can facilitate access to loss adjusters, local lawyers, and other specialists. Marsh, for example, dispatched specialists to Valencia to assist clients with claims in the aftermath of the flood.

Communication is key

In regions impacted by natural disasters, multinational organisations can encounter difficulties communicating with their local operations whose attention is, understandably, focused on the impacts of the incident and mitigation. Headquarters are usually situated outside the impacted regions, and often, there is a breakdown in the flow of information. For example, there were communication issues in Sarazin, Brazil, during the floods last year. Organisations should establish protocols and backup communication methods to ensure continued dialogue during natural catastrophes.

When it comes to reinstatement, multinationals sometimes fail to leverage their size to establish strong commercial relationships with contractors to secure priority for reinstatement work. Following typhoons in Vietnam and Macao a few years back, the supply of contractors available to carry out the reinstatement work was far less than the demand. Therefore, incorporating priority into vendor contracts is recommended, as from a claims perspective, the sooner reinstatement occurs, the lower the financial loss, which results in a reduced business interruption claim. Also, from a commercial and reputational perspective, any business clearly wants to resume normal operations as soon as possible.

With data indicating that the severity and frequency of natural catastrophes are on the rise, risk management is ever more important, requiring multinationals to ensure they are adequately prepared. They should review the wording and declared values of their Property All Risks Policy. We sometimes encounter declared values that are set too low, which carries the risk of under-insurance, and consequently, insurers applying the average clause. When an average clause is applied, it does not reflect favourably on any party involved in the claims process, as insureds can end up considerably out of pocket for their claim.

To navigate these frequent and severe natural catastrophes, organisations should seek to obtain certainty in global programmes, which open the door to local expertise and ensure the right escalation processes are in place for handling claims. Most multinational claims are currently resolved at the local level, which is why access to on-site claims support after a disaster is essential. And when extreme events do occur, it is valuable for multinational organisations to assess their crisis management to improve their response to similar situations in the future.

For more information on multinational insurance programmes and risk management, please get in touch with your Marsh advisor.

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