Resilience and Disaster Recovery
Scott Hawkins
Executive Leader | Reinsurance & Insurance Specialist | Skilled at driving sustained value creation through long-term partnerships
I’ve been reflecting on the fact that we’re just past the mid-way point in the year and globally we’ve already experienced a myriad of extreme weather events. July was the world’s hottest month on record; heat waves and devastating fires hit Europe, the US and Asia; Cyclone Freddy travelled from Western Australia and Indonesia to the south-eastern parts of Africa, bringing landslides, floods1 and was one of the “longest-lived tropical cyclones on record”;2 there’s been intense and catastrophic flooding in India,1 and countless other events I could mention.
The sheer volume and devastation has led me to think more than usual about resilience and disaster recovery. I work in risk, and planning for what could happen is part of my DNA. However, I believe we have a lot to learn from countries who have already made changes to resilience and disaster recovery, and risk management in response to extreme weather events. I’d like to consider three examples from New Zealand, North America and the World Meteorological Organisation that really demonstrates what good can look like.
1. Just across the “Tasman”
Across the Tasman is New Zealand, fondly referred to as Australia’s Tasman cousin, and who is a leading example of a holistic approach.
Earlier last month, I was privileged to sit down with Toka Tū Ake EQC’s Chief Resilience Officer, Dr Jo Horrocks, when we recorded an episode for Munich Re Australasia’s Reinsurance Rendezvous podcast series.
We had an in-depth discussion on this very topic, and I gained valuable insights into what New Zealand has learnt from natural disasters and what their approach now looks like.
The Canterbury earthquake sequence in 2011 was a key event that triggered the development of their national disaster resilience strategy. One deliberate approach they took was ensuring there were responsibilities for all departments across government.3
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?“What was very apparent through that event or that series of events was that a disaster touches every part of society. It was as much an economic issue, a social issue, as it was about buildings and land and insurance.” 3
Dr Jo Horrocks
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During our conversation Jo shared constructive takeaways – here are a couple of highlights (and click here to catch the whole podcast conversation):
2. North America
North America has multiple interesting use cases. Here are just two.
The first is Hurricane Andrew. It hit Florida with brutal force in 1992. The destruction was at an unparalleled scale.4?
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“The unprecedented scale and severity of the damage, in part reportedly caused by lax building code enforcement, compelled the state of Florida to make broad changes that would help protect its citizens against future hurricanes.”4
In response, Florida strengthened their building codes and enforced them locally, whilst modernising their planning. The outcome has been significant. Following new hurricane events, data gathered through claims analysis and surveys demonstrates that these tougher building codes substantially reduced the damage to businesses and homes.4
In parallel, changes were made in the insurance industry in response to 11 insurers becoming insolvent within a day. They looked to improve their understanding of hurricane risk through advancement in the use and development of new technologies and risk models. This has successfully led to a lower number of business failures “due to natural catastrophes since then”.4
The second example moves inland to the Missouri River, a major tributary to the Mississippi River system. It has always had a high risk of flooding, and most recently experienced the 2018-19 flooding which for Mississippi lasted over six months, resulting in a combined damage amount of $20bn USD.5 A successful levee setback project was completed in 2021 in response to the need to build resiliency, especially given that projections indicate climate change will cause more frequent and severe flood events.5
And the outcome? According to findings, “the annual flood insurance premiums for structures within the areas benefitting directly from the Project could be reduced by over 55% through the levee setback; the reduced flooding will decrease the likelihood of disruption to local and regional businesses caused by damage to roads and other key infrastructure; notable risk reduction of closure of major highways and railways; increased resiliency translates into a positive economic impact”.5 Those with insurance will also benefit by receiving [typically] quicker and higher pay-outs vs. federal aid.5
There are also major ecological gains to be had and which the project has produced – more than 1,000 acres of floodplain were reconnected which helped diminishing species to repopulate; 400 acres of land renewed into wetlands create new habitations and contribute towards better water quality; and more places for water-based activities like boating and fishing.5
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Based on these outcomes, this project has promising potential for replication and to achieve larger scale resiliency.5
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3. World Meteorological Organisation
I was interested in taking a slightly different lens in this final illustration. The World Meteorological Organisation, a specialised agency of the united Nations, 6 have a far-reaching and multifaceted mandate which contributes to two of the UN Sustainable Development Goals - 1 (End poverty in all its forms everywhere) and 9 (Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation). ?
There is a vast amount, too much to include here, of information around their programs, partnerships, goals, achievements and outcomes – I would highly recommend visiting their website to learn more about their incredible efforts. ?However here I’ll take a high level look at just one, the Agricultural Climate Resilience Enhancement Initiative (ACREI) - a US$6.8m project funded by the Adaptation Fund and implemented by the WMO in partnership with the Food and Agriculture Organisation (FAO) and the Integovernmental Authority on Development (IGAD) Climate Prediction and Applications Centre (ICPAC).7
Their target countries, Uganda, Ethiopia, and Kenya are extremely vulnerable to climate and extreme weather events, which significantly affect the predominantly rain-fed agriculture. The ACREI program is geared towards providing the following benefits to local farmers and communities:
But what has actually been achieved? The WMO article8 on Farmer Field Schools is an encouraging read because it shows us there are already tangible outcomes - improvements in livelihoods and food security despite erratic climate conditions.8 The farmers’ incomes have increased, the climate and seasonal advisories are translated into local languages which has enabled greater adoption, informed decision making and application of integrated sustainable climate approaches to their agricultural practices.8
Final thoughts
What can we learn from these examples? Taking a holistic approach, educating and making information accessible to all communities, and shifting to a resilient mindset are probably my three biggest takeaways.
Extreme weather and climate change is not going away. But we only need to dig a little bit to discover there are so many resilience initiatives already taking place. I’ve barely scratched the surface.
If we can learn from those countries and organisations who are already shifting the needle, collectively we can make a significant step in the right direction, on a global, regional and local scale.? Putting it simply, together we need to prepare, respond and adapt and to the extent that we can learn from others, we will be able to do this quicker and likely better.
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#munichre #mitigation #resilience #climaterisk #ReinsuranceRendezvous
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References
4Reimagining resilience in a post pandemic world by Munich Re Group
Senior Insurance Finance Executive
1 年Great article Scott, mitigation and resilience is the only long term solution. Appropriate building codes, and land zoning/planning with a lense on now and the foreseeable future (100 years) will improve insurance affordability.