Another busy year for risk and insurance professionals…
You may just about remember the bad snow and burst pipes from the start of 2010; you may remember the drought conditions in parts of East Anglia. These were far from being the major climate events of the year.
2011 saw terrible human losses – 30,000 people died from the major climate events.
The economic impact
There was also a huge financial cost. The global economic losses reached $350bn, with the insured losses covering around 30% of this figure ($110bn).
Floods in Thailand caused damage to supply chains around the world. This terrible event has not only a tragic human cost (now more than 800) have died, but has exerted a huge global impact. Why?
Thailand supplied critical components to both the automotive and IT sectors – the floods have severely hampered production, affecting companies such as Sony and Toyota. The effects of the Thai floods will be felt throughout 2012.
Perhaps the most dramatic images came from the March earthquake and tsunami in Japan. The 8.9 magnitude quake was so powerful that it shortened the Earth’s day (by 1.8 millionths of a second). This event alone accounted for two-thirds of the deaths listed above, as well as the majority of the total economic losses.
How the Insurance profession helps
Many of the risks in Japan were underwritten in the UK, which is the home of international insurance and reinsurance. Brokers represent their clients when dealing with underwriters at insurance companies and, through negotiation, a premium is reached.
Some of you may remember that New Zealand was struck by a 6.3 magnitude earthquake in February, causing a $12bn economic loss of which more than 50% were insured losses.
This particular quake occurred on an unexpected fault line, which has rendered 50% of Christchurch uninhabitable. UK-based loss adjusters from companies such as Crawford and Cunningham Lindsey are spending months in New Zealand, to help local professionals work through the huge losses.
UK-based loss adjusting professionals also travelled out to Thailand, to support local practitioners.
On top of this, 2011 saw the USA hit by a massive 875 tornadoes in just one month. These caused economic losses of more than $25bn; however the one positive point from this was that the North American market is the most insured in the world, and over 70% of the losses were insured. When disasters happen, the insurance industry steps in to lessen the effects of the damage, and help to rebuild affected communities and infrastructure.
If you would like to work in a global profession that makes a difference to people’s lives, consider risk. The CII’s DiscoverRisk website is full of case studies and employer information for you to make the right career choice.