Recently, the Today Show's Dylan Dreyer visited the Glenn L.Martin wind tunnel at the Department of Aerospace Engineering at the University of Maryland (an alma mater of mine) to experience what it's like to be inside a hurricane. The video is effective, and scary; Dreyer is attached to a harness in the wind tunnel, and by the time she is experiencing sustained winds equivalent to a Category 1 hurricane - a minimal hurricane - it's obvious she's struggling to stand. It's a strong reminder of the power of a hurricane, and that the associated winds have the ability to dismantle roofs, homes and commercial structures in a matter of seconds.
But even after a hurricane moves onto its next target, or dissipates, those affected still remain "in the hurricane." The impacts of a hurricane linger long after the wind has subsided, the rain has ended, and the sun has broken through the clouds. Homes and businesses are destroyed, infrastructure is in a state of disrepair and lives are shattered. If communities are not prepared to recover in the wake of a hurricane, both physically and financially, they can feel the aftermath of a hurricane, or any other extreme event, for a significant period of time. In 2015, the 10th year after Hurricane Katrina, the population of the city of New Orleans is still approximately 20% below pre-Katrina levels. Almost three years after Hurricane Sandy, vacant lots still sit along the New Jersey coast, constant reminders of what once was.
It's imperative that communities embrace their own resiliency, and prepare for the worst. Insurance products developed by the private re/insurance industry, and designed specifically to address the needs of governments and other public sector entities, can play an important and significant role in holistic disaster risk financing schemes. These public private insurance partnerships transfer catastrophe risk from government entities to the private insurance market, can provide the governments with liquidity in the immediate wake of a natural disaster and reduce the need for budget reallocation or tax increases to finance the disaster recovery post-event. These solutions also give government decision makers, for the first time, an independent market-based estimate of a nation's seismic, climate and weather risk. By putting a price tag on unmitigated risk, a government can make more educated decisions in how to allocate its financial and human resources towards risk prevention and mitigation.
Seismic events, extreme weather events and climate change pose a very real threat to our economies, communities and societies. Now is the time to turn talk into action and implement disaster risk financing strategies - before the next big storm, fire or earthquake. The re/insurance industry can and should be an important partner to individuals, businesses and governments at all levels, by assuming some of the natural hazard risk and increasing the financial resiliency of the governments, their populations and economic producers in the aftermath of a natural catastrophe.
Category: Climate/natural disasters: Disaster risk, Floods/storms, Resilience
Location: College Park, MD, United States