FM Global: Turning natural catastrophes into irritations

FM Global: Turning natural catastrophes into irritations | Insurance Business

FM Global: Turning natural catastrophes into irritations

FM Global, one of the largest commercial and industrial property insurers in the world, is in the process of constructing a loss prevention training and operations center in Singapore. This center will offer hands-on risk mitigation education to clients, partners, industry, and government officials in Asia. The premise of the project is to improve understanding of property risks in the region and enable people to make informed decisions about their property risk management and insurance.

“Every country and every culture is different. Getting the loss prevention dialogue started may take a different approach depending on the country you’re targeting,” said Chris Johnson, executive vice president, FM Global. “For example, the economy of China is very much a planned economy, so the exchange of technical data is very different to perhaps some other countries you may look at.

“Regardless of country, the idea that people want to live, work, worship and be educated in a safe environment is pretty universal. That end game is something everyone can embrace once they know it’s possible. Our task, through projects like our loss prevention training and operations center in Singapore is to educate and connect the decision makers who can deliver that safe environment.”

When it comes to disaster preparedness and catastrophic loss prevention, there’s no ‘one size fits all’ solution, explained Johnson. What might be appropriate advice for a city planner might not be beneficial at all to a local fire marshal. Everything running through FM Global’s loss prevention training center is going to be calibrated to specific scenarios. The global firm intends to transfer the knowledge it has gained from other parts of the world into the Asian market in order to “propel the notion of turning disasters into irritations rather than disasters,” Johnson told Insurance Business.

Two countries with particularly strong catastrophic loss prevention systems are the US and Canada, according to Johnson. As major economic hubs, both North American countries have a lot of capital at risk every time a natural disaster strikes – and these extreme weather events seem to be happening with more frequency these days. After some significant losses – think Hurricane Andrew in Florida (1992), Hurricane Katrina in New Orleans (2005), and the Fort McMurray wildfires in Alberta (2016) – policymakers in the US and Canada have come up with engineering solutions to prevent similar losses happening again.

“The notion of avoiding loss seems to have moved from North America towards the East. Interestingly, it was the opposite with insurance. The Phoenicians got the idea of mutual insurance going and exported it the other way,” Johnson commented. “So insurance followed the silk road, whereas notions of avoiding and mitigating loss have tended to go the other way.

“What we’re seeing today, particularly with the exchange of knowledge and data enabled by the Internet and other technologies, is that we have a chance to bring the best of both insurance and loss prevention together and tailor them so that they’re appropriate for new economies, emerging economies and managed economies. That’s what we’re trying to achieve with the loss prevention training and operations center.”