A recent ACE Group report showing the need for broad property insurance from flooding and wind damage shows that a national flood policy is still on the front burner, says the president of Swiss Re.
“Has the issue lost any steam? Our report came out in mid-September, and we got a lot of feedback and reaction when we issued it,” says Sharon Ludlow, the president and CEO of Swiss Re. “While ACE is a specific look, ours was more of a global look – but people will still take notice of that kind of research.”
The ACE Group recently released a white paper on the major wind and flooding events that struck southern Alberta, the U.S. eastern seaboard and Colorado.
“Recent extreme windstorms and flooding events – from Superstorm Sandy to the devastating floods that deluged Calgary and Boulder, Colorado – underscore the need for broad property insurance protection,” states the ACE USA white paper, Innovations in Flood Insurance Protection.
ACE USA is the U.S.-based retail operations of ACE Group.
“In the aftermath of Superstorm Sandy, many corporate risk managers whose organizations had experienced a flood loss found their companies facing a new exposure,” says Jeremiah Konz, report author and senior vice president of ACE North American Property & Specialty Lines, says in a statement from ACE Group. “Because the financial limits of their existing insurance policies were exhausted, they were responsible for additional financial losses in the event of another flood.” (continued.)
#pb#
Ludlow does see movement on this issue in Canada going forward.
“Within Canada, both the federal and provincial governments are very actively looking for what the right solutions are going forward,” Ludlow told Insurance Business. “The industry associations, individual companies, I still see a lot of activity on a variety of levels; so I wouldn’t use the phrase ‘lost steam,’ I would say ‘carefully considering the way forward,’ and that takes some time.”
The Swiss Re report issued in September, Mind the Risk: A global ranking of cities under threat from natural disasters, was a global report on flooding and earthquakes, and ranked all of the cities in the world.
“That research was gathered using our CatNet tool, that looks at the geospatial of the urban areas, with a number of urban centres around the world that are especially at risk from natural disasters – a laundry list of catastrophes that could occur,” says Ludlow. “We need to strengthen the resilience of the cities, make sure our consumers and governments are all collectively that take actions that mitigate this risk.”
Although Ludlow was quick to point out that there were no Canadian cities in the top 10 on the Swiss Re list, it is important that the process continue to move in the direction of a cohesive, sensible flood policy.
“If you collectively want to make the right change, you have to have all of the right stakeholders, and take all of the right steps, and make sure all of the right research is behind you. That just takes some time,” she says. “There are a number of small steps and milestones being taken routinely along the way. It isn’t a matter of people talking about it without action – you need those steps before you see the end solution.”
