Preparedness demands leaders who envision big-picture issues

Preparedness in the event of a catastrophic event could prove the difference between life and death, economic resilience and recovery, Don Forgeron, president and CEO of the Insurance Bureau of Canada, told delegates to the National Insurance Conference of Canada in Quebec City on Oct. 1.

Preparedness demands considering the big picture, something Forgeron suggested is one of the most important characteristics of leadership. “It looks beyond the consuming preoccupations of the present to the emerging significant risks of the future,” he said.

One of those emerging risks is earthquake risk. “Earthquake presents a major risk to this country. It’s an issue that’s crying out for leadership – a peril that goes beyond the focus of insurers into the homes of each and every vulnerable Canadian,” he told delegates.

“Beyond the risk to human life, an earthquake in Canada presents the most significant risk to the insurance industry and possibly to the Canadian economy.”

Natural Resources Canada predicts that within the next 50 years, there is a 30% chance of a significant quake in British Columbia, and a 5% to 15% chance of a major quake in the Ottawa/Montreal/Quebec City region, Forgeron said.

Other sources have indicated Canada could see an earthquake at any time. “We believe this is a direct call of action to our industry by forces that are beyond our control. And we must prepare now,” Forgeron emphasized.

Delegates were asked to imagine two scenarios in historic Quebec City: for both, the 7.2 magnitude earthquake would be the same, but the level of preparedness would be different. Unprepared, there would be losses related to such things as damaged or destroyed homes, collapsed bridges, severed communications, power outages, and food and water shortages.

“There would be many deaths, many more injuries,” Forgeron said. “Unsafe and unclean water would flow freely and the soil, terra firma, would liquefy.”

Prepared, losses would be reduced because of measures such as upgraded building codes, retrofits in older homes, co-ordinated response plans, and post-disaster plans integrated among all levels of government.

Forgeron urged bold and informed leadership as Canada navigates uncertain economic times, but pointed to a surprising source for optimism. “The uncertain times of the 2008-2009 financial crisis demonstrate that the Canadian property and casualty insurance business model works,” he said. The model weathered the storm independently and without government intervention.