Modeling flood risk impact on real estate portfolios

Sungwon Ahn and Fang Yang

Risk Management and Insurance Review, 2025, vol. 28, issue 3, 448-470

Abstract: This paper presents a teaching case designed to engage instructors and students in the study of risk management for real estate portfolios, with a focus on the growing impact of flooding in the United States. The case introduces a flood‐adjusted property valuation (FAPV) model, which uses a probabilistic approach to estimate property values discounted for flood risk in flood‐prone areas. The FAPV model is then applied to calculate the Loan‐to‐Value ratio, followed by a discussion on strategies for mitigating flood risk within the portfolio. The teaching case includes a complete teaching schedule and methodology, requiring only a foundational understanding of probability and basic Excel skills. By working through this case, students gain practical insights into real‐world decision‐making processes in risk management.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/rmir.70019

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:rmgtin:v:28:y:2025:i:3:p:448-470

Access Statistics for this article

Risk Management and Insurance Review is currently edited by Mary A. Weiss

More articles in Risk Management and Insurance Review from American Risk and Insurance Association
Bibliographic data for series maintained by Wiley Content Delivery ().