Canadian Underwriter
News

Improved resiliency aided by disaster mitigation guiding decision-making: Swiss Re


April 4, 2013   by Angela Stelmakowich, Editor


Print this page Share

Canada needs to harness the collective power of government and the private sector now – before the next big storm, fire, quake or flood, Sharon Ludlow, president and CEO of Swiss Re Canada, said during the global reinsurer’s 28th annual Canadian Industry Outlook Breakfast in downtown Toronto on Thursday. 

Risk

Citing the National Disaster Mitigation Strategy (NDMS), Ludlow suggested the NDMS offers “an opportunity to put Canada on a path to increased resiliency, where disaster mitigation helps guide private and public decision-making.”

Public Safety Canada notes the strategy is based on the recognition by federal, provincial and territorial governments that mitigation is an important part of a robust emergency management framework, and that all stakeholders are committed to working together to support disaster mitigation in Canada.

Flood now has an impact on more people globally, approximately 500 million annually, than any other peril – more than storm, fire and quake, Ludlow told event attendees.

During a media briefing following the event, she noted that “flood is a very joint partnership type of discussion with the right governments and levels of authority to determine what the building codes are and where building is simply not acceptable. Otherwise, you can’t have that living happily with an insurance product in those areas.”

Canada does not have a flood insurance program, as is the case in the United States, Ludlow noted. “Part of the messaging in coming up with a flood program for a country or for a defined geographic region is making the determination jointly with government and municipalities, whatever level is necessary, on where is it appropriate to build and where isn’t it appropriate to build,” she added.

While there is some flood mapping in Canada, it does not cross the entire country and may not offer a high level of detail, Ludlow said. Part of the discussion and approach to developing a flood insurance product in Canada is having the right infrastructure in place and making flood maps that “are available at the right level of granularity and with the right technical specifications that we can use them as an industry to make those determinations jointly with government on where you build, where you don’t, what’s the code.”

However, it becomes very difficult to “turn back the clock” for any country around the world when there are already properties situated and individuals settled, Ludlow added.

Flood maps need to be as up to date as possible, emphasized Thomas Holzheu, head of Economic Research & Consulting, North America at Swiss Re. Lessons learned following Sandy have resulted in flood maps being redrawn, something that is currently under way, Holzheu noted during the media session.

But it is also necessary to draw conclusions from “designations of certain areas in the flood maps according to risks so that the building codes adjust accordingly,” he added.

It is also important that local details are reflected in premium rate. Having a combination of maps and the right incentives will help government and the insurance industry “work together in the most productive way,” Holzheu said.

Matthias Weber, chief underwriting officer for Swiss Re, noted that premium rates would signal where it may be dangerous to live and where it may be less so. With one premium applying to all, Weber pointed out, those living in less dangerous areas are, in effect, subsidizing those living in areas with higher risk.

There are other perils that would benefit from improved information and enhanced co-ordination. In Mexico City, for example, Swiss Re “worked with the government there to set up a pre-funding solution so that dollars and resources are available should there be an event,” Ludlow said, meaning there would not be “the time delay and the lag and some of the critical issues that occur post-event.”

Here at home, British Columbia is one region where there has not been a major earthquake-related insured loss, but the Cascadia fault shows the province could witness a significant event. “You have a couple of different touch points within the federal and provincial governments on how and why they need to address the issue, and certainly the lack of insured properties in Vancouver, and B.C. generally, is quite concerning in many respects, coupled with the fact that consumers believe someone else will pick up the tab.”


Print this page Share

Have your say:

Your email address will not be published. Required fields are marked *

*