Flood Protection Diversification to Reduce Probabilities of Extreme Losses

Recent catastrophic losses because of floods require developing resilient approaches to flood risk protection. This article assesses how diversification of a system of coastal protections might decrease the probabilities of extreme flood losses. The study compares the performance of portfolios each consisting of four types of flood protection assets in a large region of dike rings. A parametric analysis suggests conditions in which diversifications of the types of included flood protection assets decrease extreme flood losses. Increased return periods of extreme losses are associated with portfolios where the asset types have low correlations of economic risk. The effort highlights the importance of understanding correlations across asset types in planning for large‐scale flood protection. It allows explicit integration of climate change scenarios in developing flood mitigation strategy.