11:42 AM
Connect Directly

Resilience and Debris Removal Key In Catastrophe Recovery, Experts Say

Industry panelists discussed recovery tactics and potential for disaster in 2014 at the P&C Insurance Joint Industry Forum.

Natural Catastrophe issues were popular topics at the Property/Casualty Insurance Joint Industry Forum, held January 14 at New York City’s Waldorf-Astoria Hotel. Insurance experts and CEOs discussed how cities should bounce back from natural disasters and the likelihood that they will need to do so in the coming year.

[ Read: Riding the Wave to Better Policy Service. ]

“We can’t just keep doing business as usual when natural disasters happen,” said Stephen Flynn, professor of political science and founding director of the Center for Resilience Studies at Northeastern University. Most US cities are dependent on "aging and ailed" infrastructure, he said, and a community’s response in the aftermath of a disaster affects the overall costs.

In the event of a catastrophe, people have to consider the critical functions that make our economy work. Community recovery is driven by the power of its citizens. John M. Huff, director of financial institutions and professional registration at the Missouri Department of Insurance, noted the 2011 tornadoes in Joplin, MO, as an example. The catastrophe caused over $2 billion in insurance losses, he explained, but the "strength and resiliency of Joplin’s citizens fostered a successful recovery."

Six schools were destroyed by the Joplin tornadoes. Over the course of one summer, one was rebuilt with insurance proceeds and the combined efforts of the surrounding community. The recovery process was made more successful with efficient debris removal, which Huff said is critical in helping a town bounce back after a natural catastrophe. The disappearance of debris is a visual reminder to citizens that recovery is in progress.

2013 was a calm year for catastrophe losses, but this does not indicate anything about the coming year, said Franklin (Tad) Montross, chairman and CEO of General Re. Panelists were divided on future disaster expectations, but Montross predicted that a large disaster is likely to occur within the next few years.

"The level of catastrophes is at about half of the 10-year average, so we will probably see a significant event in the next couple years," he said.

Kelly Sheridan is Associate Editor at Dark Reading. She started her career in business tech journalism at Insurance & Technology and most recently reported for InformationWeek, where she covered Microsoft and business IT. Sheridan earned her BA at Villanova University. View Full Bio

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
User Rank: Author
1/23/2014 | 2:33:04 PM
re: Resilience and Debris Removal Key In Catastrophe Recovery, Experts Say
I remember that comment; underwriting was a popular topic during the panel. Hopefully we can see progress towards that kind of balance in 2014 (which, fingers crossed, is another low-catastrophe year).
Nathan Golia
Nathan Golia,
User Rank: Author
1/16/2014 | 6:06:18 PM
re: Resilience and Debris Removal Key In Catastrophe Recovery, Experts Say
An interesting remark during the panels was that 2013 was successful because a low catastrophe year met up with increased underwriting discipline following the previous couple years with higher activity. Yet, some panelists suggested that underwriting discipline is fraying once more. Hopefully the industry can find a happy medium between being well capitalized and prepared for disasters of increasing financial impact and the need for growth and customer acquisition.
Register for Insurance & Technology Newsletters
White Papers
Current Issue
Insurance & Technology Digital Issue
Innovation? Check. Core modernization? Check. Security? Check. Today's insurance IT challenges don't stump this year's Elite 8.