Tag Archives: insurance

PLEA Network

5 April 2017, ECOS, Before the storm. It’s a catastrophe in anyone’s book, not least those of insurance companies anticipating the tens of thousands of claims likely to be lodged.As the floods surged south in the days after Cyclone Debbie hit landfall near Bowen in north Queensland on March 28, a natural disaster was declared in five major centres in northern New South Wales.Citing the chairman of the Insurance Council of Australia, the Australian Financial Review said “in insurance terms, a catastrophe means a disaster that causes a significant number of claims in a region” and for Cyclone Debbie that could be claims over $1 billion. CSIRO’s Dr Chi-Hsiang Wang and colleagues have been researching the cost implications of extreme weather events but with a focus at the other end – predicting the likely cost before the storms. Counting the cost of extreme events Deloitte Access Economics last year delivered a report on building resilient infrastructure which estimated that, between 2002-03 and 2010-11, an annual average of more than $450 million was spent by Australian governments on restoring essential public infrastructure following extreme weather. If it’s business-as-usual, the report said, $17 billion is expected to be spent on direct replacement costs of essential infrastructure due to natural disasters between 2015 and 2050. These estimates don’t factor in the impacts of climate change. In the case of Cyclone Debbie, the wind intensity exceeded the limitations of the building specifications. “It’s not a surprise that we see considerable damage because the intensity is so high,” says Dr Wang. Until now, a cyclone with the force of Debbie was considered a once in a 2,000 year event by Australian design standard for wind actions (AS/NZS 1170.2:2011). That may change. “There’s a consensus among scientists, although not as strong as the consensus around rising global temperatures, that for some tropical cyclone basins around the world they are likely to see events of increased intensity,” he adds. What’s missing? Dr Wang says the current practice for wind impact assessment of physical infrastructure uses only wind intensity (in terms of wind gust) to gauge the damage potential of windstorms. “This ignores other threats brought upon by the accompanying rainfall and storm surge,” he says. Read More here

 

PLEA Network

29 August 2016, Reuters, Insurers call on G20 to phase out fossil fuel subsidies by 2020. Insurers with $1.2 trillion under management called on Tuesday for the Group of 20 to set a timetable to phase out subsidies for fossil fuels by 2020 when they meet at a summit in China this weekend. Aviva, Aegon NV and MS Amlin said fossil fuel subsidies were at odds with commitments by G20 nations to combat global warming agreed by almost 200 countries last year at a Paris summit. “Climate change in particular represents the mother of all risks,” Aviva CEO Mark Wilson said in a statement. The companies called on the G20 leaders, who meet in the Chinese city of Hangzhou on Sept. 4-5, to set “a clear timeline for the full and equitable phase-out by all G20 members of all fossil fuel subsidies by 2020”. A phase-out should start with the elimination of all subsidies for fossil fuel exploration and coal production, they said. Their statement was also signed by the Institute and Faculty of Actuaries and UK-based energy firm Open Energi. G20 leaders have repeatedly promised to phase out fossil fuels, the main man-made source of greenhouse gases blamed for climate change, since a meeting in 2009 in Pittsburgh. The British-based Overseas Development Institute think-tank estimated that average annual subsidies for fossil fuel production were $444 billion in 2013 and 2014, roughly four times the subsidies for renewable energy in 2013. Last week, investors managing more than $13 trillion of assets urged the G20 to ratify the Paris climate deal by the end of 2016 to help avert droughts, floods, mudslides and rising sea levels. No G20 nations have yet completed the ratification process, according to a U.N. tracker. China and the United States, the top two emitters, are widely expected to join up around the time of the G20 summit. Read more here

PLEA Network

18 March 2016, ECOS, Building disaster resilience systematically. The cost of replacing essential infrastructure damaged by disasters in the next 35 years is estimated to reach $17bn according to the latest set of reports from the Australian Business Roundtable for Disaster Resilience and Safer Communities. The reports, Building Resilient Infrastructure and the Economic Costs of Social Impact of Disasters, outline the costs associated with replacing essential infrastructure damaged by disasters and provide an overview of the direct costs of physical damage with the total economic cost of disasters. In 2015, the total economic costs of disasters exceeded $9bn, a figure that is projected to double by 2030 and reach $33bn per year by 2050 – funds that could be apportioned elsewhere on other major national projects. And as Heinrich Eder, CEO of reinsurer Munich Re, noted, these projections are based only on economic and population growth; they do not even include the increasingly detectable effects of climate change. These are big, and socially traumatic, numbers. Long-term they have the same sort of potential to create holes in national and state budgets as our ageing population does—the subject of repeated Intergenerational Reports and eventual decisions about adjusting retirement age. It is clear to us, based on our work, that investing much more in disaster resilience as a nation will reduce physical damage, avoid social disruption and trauma, and lessen this capricious burden on state and national budgets. In fact, estimates suggest that well-targeted investments in resilience could result in significant savings for the government. Read More here