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.
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“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 is an associate editor for InformationWeek. She most recently reported on financial tech for Insurance & Technology, before which she was a staff writer for InformationWeek and InformationWeek Education. When she's not catching up on the latest in tech, Kelly enjoys ... View Full Bio