Investing in flood defences such as dams and dykes pays off in the long term, Swiss Re says in a new report.

In a study, the reinsurer compared the economic benefits and cost ratios of selected flood adaptation measures and found mitigation is highly effective in reducing coastal damage.

Globally, the benefits of dykes and levees can outweigh costs by two to seven times, and up to 10 times in flood-prone areas.

Built to optimal standards, such measures can reduce damage by 60%-90%, especially in densely populated regions.

The report warns the price of inaction is high, as flood risk worsens amid intensifying climate change and urban sprawl.

“No adaptation is not an option,” it says. “Proactive flood adaptation provides stable financial and social benefits, unlike the high costs of post-flood recovery and rebuilding.

“A shift in mindset is required.”

Every $US1 billion ($1.54 billion) invested in building coastal flood resilience can lead to a reduction in damage of up to $US14 billion ($21.6 billion), the report says, citing a UN study last year.

But despite suffering significant floods, many countries refrain from prioritising adaptation investment, Swiss Re says.

“Minimising flood risk also makes insurance easier to obtain and more affordable, which is crucial as climate change intensifies and causes more frequent weather-related disasters.”