RenRe event to focus on Sandy’s lessons
Lessons learnt from the experience of Hurricane Sandy barrelling into New York and New Jersey in 2012 will be the focus of a RenaissanceRe-hosted forum at the New York Stock Exchange next week.
Manhattan’s recovery from Sandy, the second-costliest US hurricane in history, will also be brought to the fore at the event, as will Bermuda’s key role in providing insurance and reinsurance coverage.
The New York Recovery & Resilience Leadership Forum is expected to bring together 170 leading insurance industry experts, scientists, environmentalists and policymakers.
Stephen Weinstein, group general counsel of RenRe, is the event host, and this week he spoke to The Royal Gazette about the aims of the forum on June 2.
“It is to share our science and research — all for free. We are trying to encourage communities to make themselves resilient,” he explained, referring to the need for a proactive approach to preparation before a natural disaster strikes, and having adequate insurance coverage to cope with losses.
At the heart of the matter is a need to accelerate resiliency and close the coverage gap.
Manhattan and the wider New York and New Jersey region bore the brunt of the damage inflicted by Hurricane Sandy.
The storm highlighted the gap that exists between total economic losses and losses that were covered by insurance. Of the $71 billion of economic losses in the US only about $18.75 billion, excluding flood insurance claims covered by the federal flood insurance programme, were insured losses.
Bermuda insurers and reinsurers paid out about $3 billion of the claims.
Manhattan’s vulnerabilities were shown up by Sandy. A day after the hurricane hit, banking analyst Dick Bove noted the storm had exposed how much of the city’s physical infrastructure was “19th century”.
Among the confirmed speakers at next week’s forum is Katherine Greig, the head of New York City Mayor’s Office of Recovery and Resiliency, and she is expected to discuss lessons the city has learnt and acted on.
Mr Weinstein, who is also president of the RenaissanceRe Risk Sciences Foundation, said: “New York has done a lot of smart things.”
Speaking about the forum, Justin O’Keefe, RenRe’s chief underwriting officer, said: “We are very focused on helping communities worldwide close the coverage gap — meaning the gap between the economic costs of disasters and the amount that is currently insured. Our position is to support our clients and the communities they serve worldwide, and to be proactive as well.”
One way of doing this is through the formation of public-private collaborations. The forum will bring together insurers and reinsurers with public entities, including the Federal Emergency Management Agency and the National Flood Insurance Programme.
Mr Weinstein said the take-up for flood insurance in the US was only 10 per cent. It is a similar figure for residents taking out earthquake coverage in California.
One reason for that low figure is the mistaken believe that in the event of a catastrophic event, the government will step in and fill the gap. However, the reality is usually quite different, with government assistance to householders sometimes amounting to only a few thousand dollars, or even just a few hundred.
The importance of communities taking steps to make themselves more resilient before a natural disaster hits, and ensuring that adequate insurance is in place to act as a post-event cushion, will be key messages at the event.
“Preparation saves lives and money. Financial preparation makes it more recoverable,” said Mr Weinstein.
Bermuda’s example, both in terms of protecting itself from the ravages of hurricanes through strong building codes and designs, and taking seriously pre-storm preparations, will form part of the message.
These aspects are expected to be touched upon by Michael Dunkley, the Premier, who is a confirmed speaker at the event.
Mr Weinstein said: “RenaissanceRe is born and bred Bermudian. Bermuda is the most important reinsurance market. The island has a great story to tell.”
Bradley Kading, president of the Association of Bermuda Insurers and Reinsurers, and members of the Bermuda Business Development Agency will be among the island’s contingent in New York.
Mr Weinstein said it was an honour that the Premier would be attending, and that it was important to remind the wider community about the role Bermuda’s insurance and reinsurance industry played assisting in the aftermath of Sandy and other catastrophes.
US media outlets are expected to cover the forum.
Mr Weinstein added: “The forum is to share scientific expertise and research with the communities that we serve economically.
“Communities that are exposed to risk should plan for the exposures, both physically and financially.”
To find out more about the Risk Mitigation Leadership Forum Series visit: http://mitigationleadership.com/
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