Geneva Association urges action on disaster risk reduction, building in a more risk-conscious way

The Geneva Association has called on delegates now meeting in Warsaw for the United Nations Climate Change Conference of the Parties (COP19) to recognize the importance of country-wide disaster risk reduction measures and risk-conscious urban planning and building standards.

“Investment in rebuilding in a more risk-conscious and risk-resilient way will be recouped many times over when further disasters occur and its impacts are reduced,” Michael Butt, chairman of Axis Capital and co-chairman of The Geneva Association’s climate risks and insurance working group, noted in a statement Thursday. The association’s membership comprises CEOs from the world’s top insurance and reinsurance companies.

“The insurance industry stands ready to collaborate with governments on the development of more resilient communities and infrastructure, and wherever possible will provide its financial shock absorption function that reduces the financial burden on governments and increases the recovery of individuals and economies alike,” Butt reports.

“In the developing world, forms of micro-insurance can also help reduce individual financial vulnerability to events such as Typhoon Haiyan and accelerate an individual’s recovery,” he adds.

The Geneva Association points out that extreme weather events are becoming more frequent and more severe while, and at the same time, coastlines and other areas exposed to natural catastrophes are continuing to be developed without serious consideration for these increased risks.

In the Philippines, parts of which were devastated by Haiyan, the association notes an opportunity exists to rebuild a more resilient economy and communities. The scarce resources available to developing world countries are exhausted by the need to rebuild communities and their economies following disasters and the associated financial burden will fall largely on individuals and the government, with foreign aid providing limited external support, the statement adds.

“Elsewhere, it is vital to use disaster-risk conscious practices for new or replacement infrastructure and developments. Doing so will build resilience over time such that within a couple of decades, a more disaster resistant community will evolve,” the statement adds.

A similar call to action was issued by The Geneva Association last month, while marking the one-year anniversary of Hurricane Sandy. Over the week after the hurricane first made landfall off the coast of Jamaica, it caused US$68 billion of damage and killing at least 286 people, notes an association statement.

At that time, The Geneva Association called on governments to expand and increase their disaster resilience and response efforts.

It noted the climate is changing and the speed at which these changes are taking place is accelerating, with recent insurance industry data confirming that both the cost and the frequency of climate-related insurance claims are rising. This is partly attributable to a greater number of policyholders, an increased value of possessions and an increased frequency and severity of events, it added.

“The way we construct our societies needs reconsideration because risks are not being accounted for correctly and this is the responsibility of governments,” Butt said at the time. “There is a clear correlation between risk accumulation and economic growth, which is saving up the potential for greater economic and human losses in the future, not least in the face of a changing climate.”

In the statement today, John Fitzpatrick, secretary general of The Geneva Association, sys the global governors present at the COP19 meetings have the ability and the opportunity to increase disaster risk resilience globally. “In the coming days, the decisions they make will be influential in the life prospects for many people around the world, they must seize this opportunity to do so,” Fitzpatrick adds.