building resilience to property risks arising from extreme weather 11 july 2013 caroline woolley...
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Building resilience to property risks arising from extreme weather
11 July 2013
Caroline WoolleyMarsh
Martin Townsend
BRE Global
David Wilkes
ARUP
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Building resilience to property risks arising from extreme weatherAgenda
• Panel presentations and discussion:– Caroline Woolley – Risk and Property Practice Leader, Marsh.– Martin Townsend – Director BREEAM, BRE Global.– David Wilkes – Associate Director, ARUP.
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Building resilience to property risks arising from extreme weatherIntroduction
• Natural catastrophe (NAT CAT) risk and the tools to tackle it:– NAT CAT landscape.– Narrow the gap between total and insured losses.– NAT CAT risk management best practice.
• Making cities resilient.
• Property sustainability.
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Natural catastrophesIncreased frequency and severity
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Natural catastrophesSignificant insured losses – 2011 to Q4 2012
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Natural catastrophesNarrow the gap
• Insured versus uninsured losses (source: Munich Re, 2013):
– Katrina (2005) – Insured loss USD62.2 billion. Total loss USD125 billion.
– Japan (2011) – Insured loss USD40 billion. Total loss USD210 billion.
– Thailand (2011) – Insured loss USD16 billion. Total loss USD43 billion.
– Sandy (2012) – Insured loss USD30 billion. Total loss USD65 billion.
– In US, 64% of total losses are insured.
– In Europe, only 16% of total losses are insured.
• Reasons include:
– Exclusions (Japan).
– No insurance.
– Unavailable insurance.
– Restricted insurance.
– No reinsurance.
– Underinsurance.
– Emerging risks.
– Claims disputes.
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NAT CAT risk managementNAT CAT Pack
• Our view of best practice in relation to natural catastrophe risk management and transfer.
• Approach:
• Risk identification.
• Risk measurement.
• Risk improvements.
• Risk treatment.
• Full spectrum from data collection, to business continuity management, through to claims.
• Includes property sustainability and resilience.
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NAT CAT risk managementSpectrum
• NAT CAT Risk Map.
• Natural hazards and catastrophe modelling.
• Supply chain risk management.
• Business continuity management.
• Business interruption insurance reviews.
• Updates – Guy Carpenter CAT Central.
• Placement, including Bowring Marsh: Global Property.
• Insurance claims preparation.
• Property sustainability – green buildings.
• UNISDR.
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Natural catastrophesNAT CAT approachModelling process own locations:
• NAT CAT Risk Map Package – Complete overview to identify exposures. NAT CAT zoning for all locations, using CS Stars technology and the NATHAN1 database.
• Vulnerability – The extent of damage to property at a given event intensity. How robust are your assets?
• NAT CAT modelling – Modelling of specific locations using AIR/RMS2 – likelihood of events to establish loss estimates and limits.
• Risk financing – What proportion of the loss is retained by the company and what proportion is (or should be) insured?
Supply chain:– NAT CAT Risk Map Package – Review of
risk for key suppliers’ NAT CAT zoning information.
1NATHAN: Natural Hazards Assessment Network 2AIR/RMS: AIR Worldwide/Risk Management Solutions
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Making cities resilientHow you could help
• City member
Becoming resilient.
Contributions to community.
Business Emergency Response Group (BERG) – part of Business in the Community (BITC), a Prince’s Trust charity.
Partner of the UNISDR, supporting the “Making Cities Resilient” campaign.
• City adviser
Risk management.
Insurance expertise.
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Property sustainability
• Main categories:
– New build.
– Retrofit.
– Rebuild after a loss.
• Importance of insurance funds in recovery after a NAT CAT event.
• Rebuild in an environmentally friendly and robust way, and insurers pay.
• Green building and resilient repairs clauses.
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GRAPHICS NO: 12-0205
David Wilkes - Arup
“Building” Resilience into InfrastructureRisks Arising from Extreme Weather
14 David Wilkes – Former manager – Resistant Infrastructure
15 People and Propert
16
Definitions • Resistance
Designing to exclude, or protect against design hazards
so that normal operation can continue
• Resilience
Designing, or adapting so permanent damage is
avoided, structural integrity maintained,
normality resumed as quickly as possible
17
UK CPNI, UK Govt.those essential facilities systems, sites and networks…upon which daily life depends.
The sectors that are considered to deliver ‘essential’ services are:
•Food•Water•Government•Finance•Health•Emergency Services•Transport•Communications•Energy
Building Resilience into Infrastructure
18 Building Resilience into Infrastructure
Food
19 Building Resilience into Infrastructure
Water
20 Building Resilience into Infrastructure
Government
21 Building Resilience into Infrastructure
Finance
22 Building Resilience into Infrastructure
Health
23 Building Resilience into Infrastructure
Emergency services
24 Building Resilience into Infrastructure
Transport
25 Building Resilience into Infrastructure
Communications
26 Other Urban Resilience Definitions
27
28 Natural Disasters
29
30 Hunters Point New York - Resilience
31 NYS2100 – Post Sandy Building retrofit
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NAT CAT Risk Map
• Latest addition to the NAT CAT Pack.
• Collaboration with CS Stars using Risk Goggles.
• First step – overview of all exposures.
• This is an interactive map of clients complete portfolio of assets, including suppliers’ locations where appropriate. From a single view you can see all you property risk data, and now this includes NAT CAT hazard exposures.
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Supply chain risk management
• Damage and non damage.
• Traditional property damage/business interruption (PD/BI) policies:
– Extension clauses.
– Damage only.
– First tier only.
– Restrictions.
• Supply chain cover:
– Non-damage BI/supply chain policy development.
– Zurich, AIG, Munich Re and Allianz.
– Supply chain assessments.
– Captive approach.