The devastating impact of Hurricane Florence has led many to examine their organization’s disaster preparedness efforts. Aside from the sheer size and scope of this storm, additional factors further complicated preparations.
First, a rapid change in conditions over the past two weeks led to a rapid increase in storm activity—as many as six tropical cyclones were active in the northern hemisphere simultaneously (three of which were in the North Atlantic). Second, as Florence neared landfall, a dramatic shift in the forecasted impact areas prompted a last minute update of contingency plans. These challenges, combined with the trend of slower, more damaging storms, raises the bar for how sophisticated systems need to be in order to manage these risks.
The enormous Mendocino Complex fire has burned more than 450,000 acres and still isn’t fully contained. Hurricane Lane unleashed historic levels of damage in Hawaii. Both of these natural disasters earned significant media coverage and mark the type of events typically considered when trying to manage the risk from natural disasters.
Assessing the most common threats
The largest disasters dominate media coverage. Yet when it comes to insurable losses, the factors most likely to cause damage to an organization may not always be the ones making headlines. To effectively manage these risks, risk managers must first focus on these events through the lens of preventing losses and preserving business continuity.
Munich Re reports that 2017 was the second most expensive year for natural disasters ever recorded, with overall global losses estimated at over $360B. For the U.S., last year’s severe storms resulted in a share of losses that was significantly higher (50%), than the long-term average (32%). A recently published Business Insurance special report cites estimates of insured losses of $15.4B–with $12B caused by inland flooding–stemming from Hurricane Harvey, alone.
Ernst Rauch, head of Munich Re’s Corporate Climate Center, holds that these patterns are likely to continue. “We have a new normal. 2017 was not an outlier.”
A quick look at the weather on the first day of Spring seems to underscore that point.
- Businesses in the mid-Atlantic and Northeast expect to be digging out from the fourth winter storm in 3 weeks.
- High winds and hail are causing damage across the Southeast.
- Flash flood watches have been issued by the NWS in parts of Southern California.
Is your business prepared for the “new normal”?
With large-scale natural disasters becoming increasingly common and more costly, a renewed focus on business continuity and disaster recovery is essential. Preparing for these events, along with the ability to rebound from them, are a factor on which businesses must now be able to compete. …
Compass Group USA risk management team acts quickly to collect business interruption and property damage details using audit and workflow tools in Origami Risk.
In a recent interview, Origami Risk CEO Bob Petrie was asked for his thoughts on the evolution of the RMIS marketplace over the past five years. Petrie cited two factors as key drivers of change in the RMIS market. The first, rapid advances in technology, has allowed RMIS vendors to provide new tools that gives users the ability to “quickly and easily integrate data” and “make full use of mobile technology”. The second driver is an increased focus on risk mitigation. While claims management features have always been a central RMIS systems component, it’s this change that has spurred the development of adaptable “tools to help manage pre-loss processes and streamline workflows, as well as to collect and disseminate critical data.”
The way in which Compass Group USA—a leading foodservice and support services provider with over 200,000 employees—is using Origami Risk in the days and weeks following Hurricanes Harvey and Irma, has served as an example of an innovative and timely use of these tools.
I’ll let the scientists of the world argue over whether climate change is driving more frequent and severe weather patterns. What I will argue is that any organization that is unprepared for severe weather events—regardless of frequency—is putting its business on the line.
Plenty of recent reports, like the World Economic Forum’s Global Risks Report 2016, have indicated severe weather should be a concern for organizations. The business risks are many, but commonly come in the form of costly property damage and halted business operations. To overcome these challenges, an organization must proactively manage risks and promptly handle claims resulting from severe weather. …