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NJ Future Sandy One Year Later Risk Linkin Oct 29 2013
 

NJ Future Sandy One Year Later Risk Linkin Oct 29 2013

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Innovative insurance and re-insurance products for the public sector in the wake of Superstorm Sandy. Part of the Sandy One Year Later conference Oct. 29, 2013, at Monmouth University, co-presented by ...

Innovative insurance and re-insurance products for the public sector in the wake of Superstorm Sandy. Part of the Sandy One Year Later conference Oct. 29, 2013, at Monmouth University, co-presented by the Union of Concerned Scientists and the Recovery Fund as well as New Jersey Future and Monmouth University.

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    NJ Future Sandy One Year Later Risk Linkin Oct 29 2013 NJ Future Sandy One Year Later Risk Linkin Oct 29 2013 Presentation Transcript

    • Rethinking Risk in a Changing Climate Megan E. Linkin, Ph.D., CCM Natural Hazards Expert, Swiss Re Global Partnerships Sandy: One Year Later Monmouth University, October 29, 2013
    • Economic and Insured Losses 1980 - 2012 Source: Swiss Re Economic Research and Consulting   Increasing trend in magnitude of annual losses Larger proportion of losses are uninsured M. Linkin, Swiss Re | Sandy: One Year Later | Monmouth Univ., Oct. 29, 2013 2
    • Planning for Climate Change using a Risk Management Framework Modeling expertise The Economics of Climate Adaptation Methodology Innovative Alternative Risk Transfer Solutions Education and consultation services M. Linkin, Swiss Re | Sandy: One Year Later | Monmouth Univ., Oct. 29, 2013 3
    • Planning for Climate Change using a Risk Management Framework Modeling expertise The Economics of Climate Adaptation Methodology Innovative Alternative Risk Transfer Solutions Education and consultation services M. Linkin, Swiss Re | Sandy: One Year Later | Monmouth Univ., Oct. 29, 2013 4
    • Swiss Re's proprietary model considers four elements that determine a Cat loss Hazard Vulnerability How often / how strong? Value distribution How well built and protected? Cover conditions What exactly is covered ... where... and how?  Sums insured Example Hurricane “Charley” Aug 2004  Cover limits  Deductibles  Exclusions  etc. M. Linkin, Swiss Re | Sandy: One Year Later | Monmouth Univ., Oct. 29, 2013
    • Planning for Climate Change using a Risk Management Framework Modeling expertise The Economics of Climate Adaptation Methodology Innovative Alternative Risk Transfer Solutions Education and consultation services M. Linkin, Swiss Re | Sandy: One Year Later | Monmouth Univ., Oct. 29, 2013 6
    • The Economics of Climate Adaptation Case Study: New York City  December 2012: Mayor Michael Bloomberg launches the Special Initiative on Rebuilding and Resilience (SIRR) to develop a comprehensive plan to protect the city of New York from future storms.  Swiss Re and McKinsey have a proven track record in assessing damage, evaluating natural hazard risk and identifying and quantifying the costs and benefits of adaptation measures in more than 20 countries and regions around the world dating back to 2008.  Using information about infrastructure, building stock and mitigation and adaptation measures from the City, Swiss Re and McKinsey performed economic loss potential analysis for current and future climate scenarios with and without adaptation/mitigation strategies. M. Linkin, Swiss Re | Sandy: One Year Later | Monmouth Univ., Oct. 29, 2013 Source: The City of New York 7
    • Planning for Climate Change using a Risk Management Framework Modeling expertise The Economics of Climate Adaptation Methodology Innovative Alternative Risk Transfer Solutions Education and consultation services M. Linkin, Swiss Re | Sandy: One Year Later | Monmouth Univ., Oct. 29, 2013 8
    • Traditional vs. Parametric – Benefits to buyer Topic Traditional Insurance Parametric Solutions Use of Proceeds Intended to cover loss sustained Used at buyers discretion Speed of Payment Subject to loss adjustment (can be slow) Rapid: 2 – 6 weeks Loss Adjustment / Administrative Process Yes - buyer may need own claims adjusters No – little claims administration needed Transparency Loss settlement is complex to explain Parametric triggers easier to explain Pricing Flexibility Limited modifications Structure can be adjusted to price Changes in Exposure Annual adjustments No adjustment needed M. Linkin, Swiss Re | Sandy: One Year Later | Monmouth Univ., Oct. 29, 2013 9
    • How do Parametric solutions work: MultiCat Mexico hurricane example Trigger: Hurricane of 920 mb or lower through box = payment M. Linkin, Swiss Re | Sandy: One Year Later | Monmouth Univ., Oct. 29, 2013 10
    • Planning for Climate Change using a Risk Management Framework Modeling expertise The Economics of Climate Adaptation Methodology Innovative Alternative Risk Transfer Solutions Education and consultation services M. Linkin, Swiss Re | Sandy: One Year Later | Monmouth Univ., Oct. 29, 2013 11
    • Knowledge Sharing Increasing Climate Resiliency  Founding sponsor of Climate Week NYC  Mind the Risk report – Calculated affected population and lost economic productivity for 616 metropolitan areas globally. – NYC/Newark metro region: Ranked #1 in potentially affected storm surge population in US  100 Resilient Cities Challenge – Support at least 100 cities in the next three years to appoint Chief Resilience Officers (CRO), create resilience strategies, and establish a CRO support network to share information and best practices. M. Linkin, Swiss Re | Sandy: One Year Later | Monmouth Univ., Oct. 29, 2013 12
    • Expertise for our clients CatNet  Web-based hazard mapping tool  Real time information regarding impending and on-going events.  Post event footprints.  Swiss Re Global Flood Zones. Source: ©GfK GeoMarketing Map Edition World, Swiss Re GEOservices M. Linkin, Swiss Re | Sandy: One Year Later | Monmouth Univ., Oct. 29, 2013 13
    • Expertise for our clients CatNet  Web-based hazard mapping tool  Real time information regarding impending and on-going events.  Post event footprints.  Swiss Re Global Flood Zones. Source: ©GfK GeoMarketing Map Edition World, Swiss Re GEOservices M. Linkin, Swiss Re | Sandy: One Year Later | Monmouth Univ., Oct. 29, 2013 14
    • Expertise for our clients CatNet  Web-based hazard mapping tool  Real time information regarding impending and on-going events.  Post event footprints.  Swiss Re Global Flood Zones. Source: ©GfK GeoMarketing Map Edition World, Swiss Re GEOservices M. Linkin, Swiss Re | Sandy: One Year Later | Monmouth Univ., Oct. 29, 2013 15
    • Expertise for our clients CatNet  Web-based hazard mapping tool  Real time information regarding impending and on-going events.  Post event footprints.  Swiss Re Global Flood Zones. Source: ©GfK GeoMarketing Map Edition World, Swiss Re GEOservices M. Linkin, Swiss Re | Sandy: One Year Later | Monmouth Univ., Oct. 29, 2013 16
    • Expertise for our clients CatNet  Web-based hazard mapping tool  Real time information regarding impending and on-going events.  Post event footprints.  Swiss Re Global Flood Zones. Source: ©GfK GeoMarketing Map Edition World, Swiss Re GEOservices M. Linkin, Swiss Re | Sandy: One Year Later | Monmouth Univ., Oct. 29, 2013 17
    • Concluding Thoughts  Managing climate change and its impacts will require innovative, multidisciplinary approaches.  Insurance is a vital component when considering a holistic, comprehensive approach to climate change related disaster risk financing.  Understanding climate change is of paramount importance to the insurance industry.  Academia, the public sector and private citizens can and should tap into the wealth of risk management knowledge provided by the insurance industry. M. Linkin, Swiss Re | Sandy: One Year Later | Monmouth Univ., Oct. 29, 2013 18
    • Thank you
    • Legal notice ©2013 Swiss Re. All rights reserved. You are not permitted to create any modifications or derivatives of this presentation or to use it for commercial or other public purposes without the prior written permission of Swiss Re. Although all the information used was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the details given. All liability for the accuracy and completeness thereof or for any damage resulting from the use of the information contained in this presentation is expressly excluded. Under no circumstances shall Swiss Re or its Group companies be liable for any financial and/or consequential loss relating to this presentation. M. Linkin, Swiss Re | Sandy: One Year Later | Monmouth Univ., Oct. 29, 2013 20