Weather Risks Often Overlooked

Unpredictable weather is a risk that can’t be put off or ignored. In fact, insurer payouts for weather-related catastrophes rose from $15 billion a year between 1980 and 1989 to a staggering $70 billion annually between 2010 and 2013, a study found.

While major weather events are a focus of businesses, small events can still have a big impact, according to The Weather Business: How Companies Can Protect Against Increasing Weather Volatility by Allianz Global Corporate & Specialty.

Even though weather volatility is shown to be rising globally, organizations are still failing to protect their revenue from the risks of changes in temperature, snowfall, wind levels, rainfall and too much sun, the report found. Changes in weather can also impact a number of industries including construction, energy, retail, tourism, food, distribution and transport.

Bad weather, however, is no longer an excuse for company stakeholders. Analysts, lending and rating agencies are increasingly looking at whether weather risks are included in a company’s risk management program, the study found.

Weather risk management can help companies hedge the risk posed by fluctuations in weather, similar to how companies already combat the threats of interest rate and foreign currency exchange movements, the report said.

GOCE Satellite Makes Fiery Fall to Earth

Bill Chater: GOCE Re-entry

As captured – and tweeted – by skywatcher Bill Chater in the photo above, the European Space Agency’s Gravity Field and Steady-State Ocean Circulation Explorer (GOCE) re-entered the atmosphere on Sunday, making an uncontrolled fall after running out of fuel last month.

Launched in 2009, GOCE mapped variations in Earth’s gravitational field to help scientists better understand how gravity affects phenomena like ocean circulation and sea level. As Slate reported, the satellite only spent about a quarter of its time over land, so the odds were high for a safe crash into the ocean, but when an object weighing over a ton is in a free-fall to Earth, the risk is noteworthy.

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While scientists knew that most of the satellite would burn up during approach, its 25 to 45 pieces of debris weighing up to 200 pounds each pose a significant threat. Without any means of controlling where it would land, officials from the ESA, Inter-Agency Space Debris Coordination Committee and United States Strategic Command closely monitored the massive “space debris” until it fell into the South Atlantic off the tip of South America, south of the Falkland Islands.

Since 2008, United Nations guidelines have attempted to reduce the danger of space debris, and scientists now build extra fuel and thrusters into space-bound objects to help control re-entry.

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GOCE had already been designed when the guidelines were issued, but future iterations would likely include these failsafes.

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The risk of uncontrolled space debris is increasingly common, however. On average, one piece of tracked “space junk” falls every day and one intact defunct spacecraft or old rocket body comes back every week, BBC reported. Renowned astrophysicist Neil Degrasse Tyson was quite thorough in pointing out that major space debris disasters like the one depicted in Gravity are scientifically questionable at best, but the everyday risks merit serious consideration as increasing what we send into space increases what we can expect to fall back. There are currently about 750 live satellites circling Earth and an estimated 500,000 pieces of space debris in orbit, dating as far back as the 1958 Vanguard 1 research satellite.

Security a Focus after N.J. Mall Shooting

The most recent mall shooting, just a few days ago at the Garden State Plaza in N.J., again heightened the focus on risk management and security nationwide.

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Parents have trusted that malls would be safe for teenagers to meet with friends, but places for public gathering can become targets for violence. The pressure is on for organizations to examine their security measures and contingency plans.

David Boehm, with Security USA said in an interview with CBS New York that the U.S. can learn from security experts in Israel. Similar to Israel, he said, our country heading in the direction of having officers stationed at entrances and exits to malls.

In an article written for Security Management, Donald W. Story, a former police chief and director of corporate security for two major shopping center developers observed that if even one shopping center is targeted in the U.S., all malls will be seen as unsafe. The public will need to be reassured, and “for that reason, it is imperative that every mall manager begin to think about how security should respond to an attack.”

The Israeli model offers lessons for U.S. malls in contingency planning, he said, adding that shopping malls, considered “soft targets” in Israel, are monitored externally by motorized and foot patrols. Vehicles entering mall property are subject to search, as are people entering malls. To do this, officers use explosion detection technology, including bomb sniffing dogs, he said, adding that unlike many mall security guards in the U.

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S., all Israeli security are armed.

Going by the Israeli model, contingency plans should be incorporated and implemented only if a heightened security posture is needed, he said.

Good contingency plans should examine coverage of the shopping mall, access, reassignment of staff’s tasks and deliveries and contractors in case of an emergency, Story said. Preventative measures should also be in place.

Because obtaining additional security officers and relying on local police for assistance might be difficult, an option would be for security officers and other staff to work longer shifts under predetermined circumstances, Story said.

The plan should address shopping center access, under what circumstances the mall would heighten control over entry, and how this would be done. Since many malls would not have adequate staffing to monitor all entrances, for example, the plan might call for closing some entrances under an elevated threat level.

Similarly, the safety plan should determine under what conditions the use of explosive-scanning technology and/or bomb-sniffing dogs would be warranted—and how this equipment would be obtained in an emergency.

Because officers would be taken from their normal duties during an emergency, minor security tasks could instead be completed by management, operations or housekeeping staffs.

Deliveries should be restricted to specific time periods when the appropriate employees are available to verify documentation, he said. Contractors, their supplies and materials should also be checked.

Officers would need to be trained to recognize certain behaviors and intercept potential terrorists. Story said they would also need instruction on proper procedures for making these assessments without being accused of profiling.

He added that some mall properties have already taken moderate and inexpensive steps to tighten mall security. Those include fire lane parking enforcement, visible waste containers, limited and guarded access to roof hatches and closer monitoring of deliveries and contractors. The Garden State Plaza, which has been praised for its preparedness, instituted security training on Sundays when the mall is closed. Shop owners also followed protocol, locking customers inside stores for safety.

New York Institutes New Disaster Protocol for Insurers

On October 28, New York Governor Andrew Cuomo announced the establishment of a new Emergency Disaster Protocol that insurers should expect to follow in the event of a future natural disaster. The protocol was communicated to insurers in the form of a circular letter on the same day. The new protocol includes many of the same measures that were put into place following Superstorm Sandy.

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“During Superstorm Sandy these steps helped us speed up relief to New York families and businesses, and they will now become a standard part of our storm response arsenal,” said Governor Cuomo. “Insurance companies have a vital responsibility to promptly process claims for consumers hit by a natural disaster and this new emergency protocol will help make sure that they live up to that standard.”

In future natural disasters, insurers can expect the following measures, among others, to go into effect: the creation of an expedited process for temporarily licensing new claims adjusters; establishment of an online report card to hold insurance companies publicly accountable for their claims processing performance; creation of a mediation process for homeowners; and institution of a temporary moratorium on the canceling of policies in storm-stricken areas for non-payment of premiums.

“Having an emergency protocol for insurers on the shelf and ready to activate at a moment’s notice will help ensure that consumers are protected when another storm strikes,” said Benjamin M. Lawsky, New York’s superintendent of financial services. This protocol will make it crystal clear to insurers what is expected of them when responding to future natural disasters and helping families and businesses get back on their feet.

In his letter to insurers, Superintendent Lawsky did state that the measures laid out in this new protocol are not all-encompassing, but that they are those the administration would be most likely to employ, “in whole or in part,” following a future disaster in the state.