During a recent Intelligent Insurer panel discussion Andrew Bart, president, Loss Adjusting, International at Crawford, suggested collaboration between insureds, the insurance ecosystem and governments hold the key to tackling unmodeled flood risks.
The floods that struck several European countries in July affected over 70,000 properties, damaged more than 40,000 vehicles, and inundated around 600km of railway track.
However, as Andrew Bart noted in a wide-ranging panel discussion for Intelligent Insurer, with more than 200 lives believed to have been lost in the floods, the event was “most of all…a humanitarian disaster”.
Bart reflected this was just the latest in a series of incidents involving excessive rainfall in Europe, leading to what he called “an aggregator effect”.
“It's not just one event, but this was extraordinary by any measure,” he said. “What is a one-in-100-year event now? What is the new normal? That's a real challenge for the insurance industry.”
While adjusters continue to face challenges in physically accessing loss-affected areas in a post-pandemic environment, they are increasingly aided by new technology, Bart said.
“Real-time modelling allows people to prioritise how we allocate resources and to respond in real-time,” he said. “We're using satellite imagery, we're using drones, we're using video capture, and we're able to help people far more quickly.”
The conversation moved on to the role of industry, government, and technology in improving disaster response and risk mitigation.
“The insurance industry can only absorb so much risk without prices increasing, and mitigation makes insurance sustainable. We really have to look at how we deal with that,”
He suggested that the effects of climate change will necessitate additional mitigation efforts, such as higher flood barriers, new building codes for CAT-exposed property, and improved technology for monitoring events.
“If you look at what's happening with the European wildfires at the moment, early warning systems save lives by allowing people to get away, but also stop industrial concerns being caught unawares, and give them the opportunity to mitigate losses,” he said.
Bart agreed with fellow panellists that a strong adaptation agenda is needed to keep risk at insurable levels.
“If we look at the history of hurricanes in the US, more people now live on the coast, so when an event hits, it's going to be of bigger magnitude, because you have a population which is concentrated into areas which are very likely to be impacted,” he said.
The discussion turned to collaboration between industry and government on risk mitigation programmes and risk financing structures.
“There are very good examples of insurers collaborating with governments and with the industry to develop mitigation strategies,” Bart agreed. “It's in the interest of broader society for that to occur and we don't want to have a situation where a cover is either unobtainable or simply unaffordable.”
As the session drew to a close, Bart highlighted that collaboration is his key takeaway from the discussion.
“Knowledge sharing is incredibly important. We're now into a world where data is more important than ever, and we need to look at how we harness that to make informed decisions about risk and make the world a more sustainable place,” he said.
“We want to create certainty for people in what is increasingly an uncertain world,” he concluded.
Thank you to Wyn Jenkins, Editor, Intelligent Insurer for inviting Crawford to participate in this panel session and also to the other panel members: Charles Blanchet, Vice President, Solutions, ICEYE, Christian Badorff, Senior Analyst, Moody’s and Daniel Stander, Special Advisor, United Nations.
The panel session is available on-demand here.