Geneva Association / by Christophe Courbage and Walter Stahel
[From an article in "Insurance Journal"] The latest report from the Geneva Association , No. 5 in the current series – Extreme events and insurance: 2011 annus horribilis -, describes the global impact of the major 2011 natural catastrophes, and analyzes the role and mechanisms of insurance in managing climate risk and other extreme events.
The report, compiled by leading insurance academics, economists and insurers, sets out in nine essays the importance of “risk adaptation and management measures in developing physical and economic resilience to natural catastrophes, including the important role of insurance in such mechanisms,” said the Association’s bulletin…
After discussing the most significant natural catastrophes that occurred in 2011 – the Japanese earthquake and tsunami, the Australian and Thai floods, the New Zealand earthquakes, and the U.S. tornadoes – The report sets out some “key lessons” learned, as follows:
• How risk management mechanisms particularly prevention, protection and compensation mechanisms as well as risk awareness, can significantly reduce the human and economic cost of natural catastrophes;
• The importance of a greater level of collaboration and coordination between governments, industry and insurance in the development of efficient and effective strategies for the financial management of extreme events;
• How public-private initiatives between governments and insurers can increase a country’s ability to accelerate economic and physical relief and recovery efforts. Also how such partnerships can increase the insurability of extreme events and make their coverage more accessible; and finally,
• That shared data, for example, flood risk mapping, can increase awareness and risk assessment of disasters and can reduce their economic and human costs…