Growing Focus on Natural Disaster Risk Heralds new ‘Age of Insurance’
London, UK, July 4, 2012 – The insurance industry plays a pivotal role in integrating new tools, technology
and solutions to protect populations and assets against growing concerns about
natural disasters and, in the process, helps ensure a sustainable future,
according to Rowan Douglas, Chief Executive Officer of Global Analytics at
Willis Group Holdings (NYSE:WSH), the global insurance broker.
Douglas, who is also chairman of the Willis Research Network (WRN), added that
the ongoing financial crisis and worsening economic environment may reduce the
ability of countries to cope with the costs of natural catastrophes and heighten
the need for countries to incorporate better preparedness and financial risk
He made these comments when delivering an opening keynote speech at the World
Bank’s Bi-Annual Understanding Risk Conference in Cape Town, South Africa. “This
meeting, entitled 'Mapping Global Risk' has brought together leaders in
technology, science, finance and public policy to develop practical ways to
increase resilience against natural disasters,” he said.
“The insurance sector is at the very heart of this process, integrating new
knowledge into decision making, setting policy standards and enabling
populations to share risks at local and global scales.
“That is the role that the insurance industry has played for centuries and the
need has never been greater, some may say we are entering a new ‘Age of
Insurance’ in the face a growing risks and uncertainties. Harnessing the
insurance mechanism and enabling us all to gain some financial security and
resilience against natural disasters is critical for enabling investment and
providing a platform for sustainable growth.”
Speaking to an audience of 500 business and policy leaders from 85 countries
Douglas highlighted how we are all united by the challenges of confronting
natural disasters. “The events of 2011 showed that even the most prepared
countries within the developed world are vulnerable to natural disaster, while
these events impacted us all through our supply chains and dependencies on key
components and commodities."
Meanwhile the growing importance of natural disaster management is evident
within the agenda of national and international institutions like the G20,
European Union and United Nations.
“It is clear that we are entering a new era of knowledge about extremes, natural
hazards and the vulnerabilities of the built environment and exposed
populations,” continued Douglas.
“Advances in mapping are revolutionising our ability to access, fuse and deploy
data from disparate sources to manage risk and provide better services to
customers. These mapping tools and technologies are at the heart of our
competitive advantage at Willis and an ongoing priority for the company,
together with our development partners in science and industry.
“Data is now being integrated from major satellite platforms and high resolution
climate models, powered by supercomputers, together with input from millions of
other contributors via crowd sourcing and social networks.
“This fusion of macro and micro sources combined with spatial referencing and
mapping is helping the insurance industry to become more resilient.”
He highlighted in particular a new Global Earthquake Model called OpenQuake,
sponsored by WRN, which will enable countries, companies and communities to
understand their earthquake risk more clearly and make sensible choices on how
to manage it.
Douglas pointed out that the insurance market has continued to function normally
despite the second largest year of insured losses in its history. “This is due
in large measure to the role of improved modelling in the last twenty years
coupled with an emerging convention that an insurance policy (and the company
that backs it) should be able to tolerate at least the maximum probable loss
that could be expected over a 1 in 200 year return period.
“There is still much to do, much to learn and much to improve, but the industry
is making enormous strides in this area of innovation and it is being recognised
and respected by our sector's customers and stakeholders.”
Willis Group Holdings plc is a leading global insurance broker. Through
its subsidiaries, Willis develops and delivers
professional insurance, reinsurance, risk management, financial and human
resource consulting and actuarial services to corporations, public entities and
institutions around the world. Willis has more than 400 offices in nearly 120
countries, with a global team of approximately 17,000 employees serving clients
in virtually every part of the world. Additional information on Willis may be
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