Disaster Preparedness


Why are some countries more resistant to supply chain disruption or better able to bounce back?

According to Margareta Wahlström, United Nations Special Representative of the Secretary-General (SRSG) for Disaster Risk Reduction, this is a puzzle that world leaders are perpetually trying to solve.

Hence the inherent value in a new online interactive tool from FM Global that ranks countries by supply chain resilience.

The 2014 FM Global Resilience Index ranks the business resilience of 130 countries around the world.

Nine key drivers of supply chain risk are grouped into three categories: economic, risk quality and supply chain factors. These combine to form the composite index. Scores are bound on a scale of 0 to 100, with 0 representing the lowest resilience and 100 the highest resilience.

Jonathan Hall, executive vice president, FM Global, explains:

Natural disasters, political unrest and a lack of global uniformity in safety codes and standards all can have an impact on business continuity, competitiveness and reputation. As supply chains become more global, complex and interdependent, it is essential for decision makers to have concrete facts and intelligence about where their facilities and their suppliers’ facilities are located.”

So which countries rank at the top of the index?

According to FM Global, Norway (score: 100), Switzerland (score: 98.9) and Canada (score: 93.2) are the top three countries most resilient to supply chain disruption.

At the other end of the scale, the index finds Kyrgyzstan (score: 6), Venezuela (score: 2.5) and the Dominican Republic (score: 0) as the countries least resilient to supply chain disruption.

Where did the United States fall?

Because of its geographic spread and disparate exposures to natural hazards, the U.S. is divided into three separate regions. All three rank in the top 25.

You might also be interested to know that China (also divided into three separate regions) ranks in the top 75. China’s weakest region includes Shanghai and ranks particularly low as a result of poor risk quality due to acute natural hazards.

Another key takeaway is the biggest riser: Bosnia and Herzegovina. The country climbed 19 places from last year, due to improvements in its political risk and in the quality of local suppliers.

And one of the top fallers in the 2014 Index is Bangladesh, with FM Global citing declining quality of both natural hazard risk management and fire risk management.

FM Global commissioned analytics and advisory firm Oxford Metrica to develop the rankings. The index allows you to browse country rankings and scores from 2011 to 2014.

With two months to go to the one-year anniversary of Hurricane Sandy, a federal task force created after the storm has issued a report that’s getting a lot of media coverage.

The plan includes 69 policy initiatives, of which a major recommendation is to build stronger buildings to better withstand future extreme storms amid a changing climate.

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, and chair of the task force, notes:

Last year alone, there were 11 different weather and climate disaster events across the United States with estimated losses exceeding $1 billion each. We know that every dollar we spend today on hazard mitigation saves us at least $4 in avoided costs if a disaster strikes again. By building more resilient regions, we can save billions in taxpayer dollars.”

The report makes clear that rebuilding to outdated standards is no longer an option given the impact of climate change and rising sea levels:

No single solution or set of actions can anticipate every threat, but decision makers at all levels must recognize that climate change and the resulting increase in risks from extreme weather have eliminated the option of simply building back to outdated standards and expecting better outcomes after the next extreme event. There is clear evidence at the national level that investments made to mitigate risk have achieved significant benefits.”

One section of the plan focuses on addressing insurance challenges, understanding and affordability.

Specifically, the taskforce recommends: streamlining payouts to policyholders in the wake of disaster; improving policyholder awareness of factors that affect flood risk and insurance rating decisions; and studying affordability challenges of flood insurance as the National Flood Insurance Program (NFIP) transitions toward full risk rates.

PC360 has more on this story.

Check out I.I.I. facts and statistics on flood insurance here.

Oceanic and atmospheric conditions in the Atlantic basin are expected to produce more and stronger hurricanes during the 2013 Atlantic hurricane season which starts this Saturday June 1 and lasts until November 30, according to the National Oceanic and Atmospheric Administration (NOAA).

In its 2013 Atlantic hurricane season outlook, NOAA’s Climate Prediction Center is forecasting an active or extremely active season this year.

This means there is a 70 percent chance of 13 to 20 named storms (winds of 39 mph or higher), of which 7 to 11 could become hurricanes (winds of 74 mph or higher), including three to six major hurricanes (Category 3, 4 or 5; winds of 111 mph or higher).

These ranges are well above the seasonal average of 12 named storms, six hurricanes and three major hurricanes, NOAA says.

Dr. Kathryn Sullivan, NOAA acting administrator reminds us:

As we saw first-hand with Sandy, it’s important to remember that tropical storm and hurricane impacts are not limited to the coastline. Strong winds, torrential rain, flooding and tornadoes often threaten inland areas far from where the storm first makes landfall.”

There’s no better time than National Hurricane Preparedness Week for residents to take steps to prepare their home, family, and business against hurricanes and other
severe weather.

Also check out disaster preparedness information from the I.I.I. to make sure you are prepared and organized before a storm hits.

As mom to a toddler and an eight-month old, the news that global production of disposable diapers could be affected following an explosion and fire at a chemical plant in Japan over the weekend, more than caught my attention.

Nippon Shokubai Co’s plant in Hyogo Prefecture produced acrylic acid, a key ingredient in a resin called SAP that is used in disposable diapers.

According to an NBCnews.com blog post, the plant produces about 20 percent of the world’s SAP and 10 percent of global output of acrylic acid.

NBC cites the Nikkei business daily saying that operations at the plant are likely to be halted for a long time and other manufacturers of SAP resins are operating in full production mode, leaving little room for back-up production.

Over at Chubb’s business blog Industry Exposure, Barry Tarnef, an assistant vice president and a senior loss control specialist for Chubb, observes that the incident serves as another reminder that supply chains are fragile.

Industrial accidents, natural disasters, labor issues (such as strikes and shortages), production problems and political upheaval, and trade disputes are just some of the main causes of supply chain disruption, according to the Insurance Information Institute (I.I.I.).

The I.I.I. notes that it can take two years or more for a company to recover from a supply chain failure and that the purchase of supply chain insurance can help protect businesses. However, insurance is only part of the solution.

As Loretta Worters, vice-president with the I.I.I. says:

Sound loss prevention engineering can best help protect the supply chain from property loss, so that insurance becomes a last resort rather than a first line of defense.”

Check out this I.I.I. presentation on how to protect your global supply chain.

As we mark the 11-year anniversary of September 11, a just-released study from the Insurance Information Institute (I.I.I.) finds that while the risk is changing, terrorism is an evolving and ongoing threat for the foreseeable future.

The paper notes that despite recent counterterrorism successes, including the killing of al-Qaida leader Osama bin Laden, the threat from terrorism risk is far from insignificant.

Cyber-terrorism is one area of growing concern for governments and businesses around the world, according to the I.I.I.

It says recent high profile attacks, such as the sabotaging of Iran’s nuclear program via the Stuxnet computer worm and malicious infiltration attempts by China, underscore the growing threat to both national security and the economy.

It goes on to cite a recent study by the Ponemon Institute in collaboration with Bloomberg Government, that estimated private sector spending on cyber security at roughly $80 billion in 2011, but noted this was not nearly enough.

The Ponemon study found that “utilities, banks and phone carriers would have to spend almost nine times more on cybersecurity to prevent a digital Pearl Harbor from plunging millions into darkness, paralyzing the financial system or cutting communications,” according to a report by Bloomberg News.

The findings were based on interviews with technology managers from 172 U.S. organizations in six industries and government.

More I.I.I. facts and statistics on terrorism risk here.

You may not be surprised to hear that more than half of American cell phone users now have smartphones, according to a report in the New York Daily News.

As Americans increasingly rely on their phones to do more than just make phone calls, there is a growing market for applications to enable those mobile lifestyles.

While many apps fall into the entertainment category, the Insurance Information Institute (I.I.I.) has just launched a free mobile disaster preparedness app that could protect your home and family.

Whether it’s a hurricane, wildfire, severe winter weather, earthquake, or other disaster, the I.I.I.’s “Know Your Plan” app for iPhone provides check lists and vital safety tips to help users prepare for catastrophe before disaster strikes.

“Know Your Plan” provides consumers with a library of preloaded checklists to learn about important property protection and preparedness steps. Customized lists can also be built from scratch.

Each checklist gives users options to set task completion dates, chart their progress and make additional notes for individual tasks.

One of the cool features of the app is that in the event of a disaster, users will be able to access a geotargeted emergency alert feed guiding them to up-to-the-minute information about local evacuation routes and other details about the disaster.

Also included are resources to help plan for an evacuation—including one for pets.

“Know Your Plan” is available in iTunes, or by searching “Insurance Information Institute” in the App store from any iPhone.

All property mitigation information was developed in partnership with the Insurance Institute for Business & Home Safety (IBHS).

“Know Your Plan” is the second in a series of apps created by the I.I.I. It follows Know Your Stuff – Home Inventory app, which is available for both iPhone and Android platforms.