July 31, 2015 | Industry Insights
Natural Catastrophes Show Need for Robust Risk Management, Insurance
Munich Reinsurance Company, one of the world’s leading reinsurers, earlier this month released its review on natural catastrophes for the first half of 2015. (Roanoke Trade is a subsidiary of Munich Re Group.) Although insured losses from natural catastrophes totaled about $12 billion in the first half of 2015, lower than the long-term average of $15 billion, there were significant deaths as a result of the earthquake in Nepal and heat wave in India and Pakistan. In fact, in the first half of the year, a total of over 16,000 people died in severe weather events and earthquakes.
According to Munich Re, the costliest insured natural catastrophe loss during the first six months of 2015 was a series of winter storms that hit the northeastern United States and Canada in February, with insured losses of $1.8 billion and total economic losses of $2.4 billion. The largest insured loss to hit Europe in the first half of 2015 was Windstorm Niklas, which resulted in insured losses of about $1 billion, said the reinsurer.
Southeastern Australia had heavy rain and flash floods in April causing insured losses of about $630 million, the report said. In addition, Category 5 Cyclone Marcia caused insured losses of about $400 million when it struck Queensland, Australia, in February.
“The natural catastrophes in the first half of the year show us once again that vulnerability to natural catastrophes needs to be reduced, particularly in emerging and developing countries. This is necessary first of all to ensure people are better protected, but also to keep losses as low as possible,” said Torsten Jeworrek, Munich Re Board member with responsibility for global reinsurance business.
In addition, having strong loss control measures in place to mitigate the extent of losses that could result from a natural disaster, along with a robust business continuity plan, are crucial to weathering devastating losses. As a logistic service provider/transportation intermediary, if you’re doing business all over the world or throughout the U.S., a natural catastrophe can hit any time anywhere halting your operation. You need to be prepared with a risk management program that anticipates and addresses all types of losses and the impact on your business.
These types of catastrophic losses also underscore the need for a comprehensive insurance program, including the appropriate property coverage should flooding, a hurricane or other type of storm damage your facility. In addition, you should make sure you have a sufficient amount of business interruption coverage in the event repairs or rebuilding takes place as a result of damage from a covered event. You may not be able to operate for a while but your expenses will continue, including extra costs you may have to move your operation to another facility temporarily.
Roanoke Trade specializes in providing a total end-to-end insurance solution for logistic service providers and transportation intermediaries. We can review your program to determine how well you are covered in the event of a natural catastrophe and whether there are any coverage gaps. Contact one of our specialists at 1-800-ROANOKE (800-762-6653).