Every dollar spent on pre-disaster risk reductions saves between $6 and $13 in damages, however, 88% of disaster management funds are allocated to post-event response.
Guy Carpenter global head of public sector risk solutions Julian Enoizi, in an article published as a part of World Economic Fund 2023 annual meeting at Davos, said the year 2022 saw a great many extreme weather events, including hurricane Ian in Florida, unprecedented flooding in Pakistan and extreme heatwaves in the UK.
In his article Mr. Enoizi indicates how the emphasis on disaster recovery rather than prevention and mitigation continues the cycle of recovering from disasters as opposed to investing in preparations for the next disaster to minimize hardship. He said there is a need for building resilience to these types of physical threats before they take place.
Mr. Enoizi writes, “There is ample opportunity for creative climate adaptation solutions to mitigate the worst consequences of climate change and rebalance efforts towards proactive adaptation. That is why one of the 2022 UN Climate Conference’s (COP 27) main goals was to scale-up adaption efforts through the UN’s Race to Resilience campaign.
“As society’s risk manager, the global insurance industry is critical in ensuring resilience to a hotter, more volatile planet. As a start, individual actions reducing individual risks are crucial. But by their very nature, climate-related risks are systemic – think rising sea levels threatening entire communities or extreme heat waves making a city uninhabitable – and therefore, demand systemic or community-wide solutions.”
Other community-level changes also contribute to climate resilience. For example, according to a recent study by Federal Emergency Management Agency, hazard-resistant building codes could help prevent at least $3.2bn a year in weather-related losses by 2040.
Evidence of the success of this approach includes Babcock Ranch, a community built to withstand more frequent and intense storms, which sustained no significant damage after hurricane Ian despite being 15 miles from Fort Myers, Florida.
Source: asiainsurancereview.com