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NEW YORK, May 22, 2020—The importance of disaster preparedness, building resilience, and innovative insurance products were the themes panelists highlighted at a virtual Town Hall co-hosted by the Insurance Information Institute (Triple-I) and ResilientH2O Partners.
With hurricane season starting on June 1, Building Resilient Businesses and Communities in the Time of COVID-19 focused on the need for the private sector to work with government and non-profit organizations to mitigate against such disasters.
The National Oceanic and Atmospheric Administration (NOAA) is predicting an “above normal” 2020 Atlantic hurricane season with 13-19 named storms. NOAA forecasters said that six—to 10 of those storms will become hurricanes and three to six of those could become major hurricanes, which are defined as category three storms or higher. This month, Tropical Storm Arthur marked the sixth straight year a named storm came in May or earlier.
The panelists acknowledged the COVID-19 pandemic, the U.S.’s economic downturn, and flood-storm threats further complicated this year’s hurricane season preparation.
“There will never be enough public dollars to conduct all the risk mitigation necessary,” said Dr. Michel Léonard, vice president and senior economist, Triple-I. “Understanding incentives, credits, swaps, and other mechanisms to engage alternative resources, investments, and capital formation is more vital than ever.”
Recognizing the cost-benefits – for doing nothing, taking certain actions, or unleashing innovative strategies – has become important to elected and appointed officials, business and industry leaders, and others in charge of allocating capital and resources, noted Chris Tomlinson, business columnist with the Houston Chronicle, who moderated the panel. “Understanding the performance, impacts, common outcomes, and long-term effects on risk mitigation to reduce loss of life, property, operations and societal instability are critical for the economic resilience of companies and communities as a result of these unsettling challenges,” Tomlinson said.
“We can no longer conduct business as usual in a current and post-COVID 19 environment, and the need to generate partnerships that have not existed in the past should not be a deterrent to exploring new financial models and insurance products across all sectors, geographies, jurisdictions,” said Richard Seline, managing director, ResilientH20 Partners.
Jeff Moseley, president and CEO of the Texas Association of Business, said 2005’s Hurricane Katrina, which hit New Orleans, prepared Houston for 2017’s Hurricane Harvey yet Harvey offered its own lessons when it came to draining lakes after the storm passed. He noted that a much more sophisticated communications system was needed to manage upstream reservoirs and downstream impacts. He said using advanced technologies and alternative designs across flood zones would help public authorities.
Dr. Daniel Kaniewski, managing director, Public Sector Innovation, Marsh & McLennan and a former FEMA deputy administrator (2017-2020), said there were three pillars of resilience: Preparedness, mitigation and insurance. “You really can’t be resilient without each of those pillars,” Kaniewski said.
“As states and local governments are making difficult budgetary decisions resulting from the COVID-19 pandemic, now is the time to explore innovative insurance solutions to create flexibility within finite budgetary resources that can help generate funding for critical migration and resiliency projects that ultimately reduce the fiscal impact of natural disasters on businesses and taxpayers,” said Katie Sabo, managing director, Public Sector Partnership, Aon.
The next virtual Town Hall co-hosted by the Insurance Information Institute (Triple-I) and ResilientH2O Partners. Technology, Insurtech and Risk-Mitigation Investment: From the Lab to Main Street, will be held next month and will focus on how private and public entities can build partnerships to increase resilience.
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