As the world economy grows, the risk to businesses, governments and the general public will be increasingly affected by the combined effects of climate change and the concentration of people and businesses in areas affected by natural hazard events.
Extreme weather events over the last few years have captured the headlines:
“Polar vortex: Frigid Arctic air again grips Midwest, nears record cold”
“Severe Weather More Likely Thanks to Climate Change”
Regardless of the media hype, we are in fact seeing a rise in frequency and severity of losses from natural hazard events. Whether it’s localized flooding from concentrated rainfall, more frequent and devastating hail-storms in Texas or last years “Polar Vortex” that once again threatens the Midwest United States, natural hazard losses are indeed mounting.
The escalation can be attributed to the growth in exposure and vulnerability. Simply put, more buildings are located in natural hazard-exposed areas, without the necessary protection.
Location, Location, Location
Factors driving increases in vulnerability, including the total assets exposed to these hazards continue to expand at a steady rate. Economic growth is increasingly concentrated in coastal urban areas, which heightens the density of economic value in regions disproportionately exposed to hazards from wind and water—the two hazards most impacted by changes in climate.
As the world economy grows, the risk to businesses, governments and the general public will be more affected by the combined impact of climate change and the concentration of people and businesses in areas affected by natural hazard events. As such, economic risks from natural hazards could potentially reach new levels.
Vulnerability is a Choice
At Affiliated FM, we believe that, with the right preparation and loss prevention measures, your clients don’t have to be vulnerable to large property loss. We are committed to partnering with you and your clients to assess their business risk performance factors and to drive down their long-term cost of risk. The following resources will assist you and your clients to prepare for potential natural hazard events.
- Affiliated FM Online—On our secure broker and client extranet, you can view live weather events that might affect your clients’ facilities. You can also review suggested risk improvements against the importance of key insured sites.
- FM Global Resilience Index—This is a new tool designed to aid financial executives in their decision-making as it relates to their supply chains and the vulnerability of locations in specific countries. The tool incorporates drivers of economic, risk quality and supply chain factors to evaluate and rank the resilience of more than 130 countries.
- Affiliated FM engineering plan services—Engage in the conceptual stage of planned expansion, migration and consolidation. We can partner with you and your clients to review and improve resiliency and business continuity for specific locations.
- Business continuity planning—We can collaborate with your and your clients to determine if a continuity plan exists and when was it last reviewed. We’ll also work with you to evaluate the factors the plan takes into consideration and determine if the contingencies are realistic.
With climate change a hot topic, it’s important to be informed and understand the risks associated with natural hazards that may affect your clients’ facilities. When we consider the potential long-term climate change trends, it’s important to take action that that makes good business sense for the client—while still protecting their property from increased risk exposure.