Category Archives: Safety

Fort McMurray Wildfire Insured Losses Up to $6.9 Billion

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Ft-McMurray map

NASA Fort McMurray wildfire map

Insured loss estimates from the wildfire in Fort McMurray, Alberta, Canada, are projected between $3.4 billion and $6.9 billion, catastrophe modeling firm AIR Worldwide reported. Officials are still in the early stages of assessing damage caused by the wildfire that began on May 1 and quickly spread from forests to neighborhoods, outpacing local firefighters’ capacity to contain it. According to AIR, the Fort McMurray wildfire is the costliest natural disaster in Canada’s history.

The fire had initially moved away from Fort McMurray, but shifted back toward the city this week, causing evacuations for the second time. About 500 to 600 people were evacuated from four small work camps, Alberta Premier Rachel Notley said in a news conference on Monday.

The fire is still uncontained and, as of May 14, had covered nearly 600,000 acres, mainly in wildlands and away from population centers. Winds are now calmer and temperatures have lowered, with considerable cloud cover and a possible shower expected—all of which are expected to help firefighting efforts.

The fire’s new threat reversed earlier efforts to return local oil sands projects to full operation, the New York Times reported. The highway through Fort McMurray was reopened several days ago to allow workers to return to the work sites, but was closed again on Monday.

Premier Notley said that five things need to be in place before residents may reenter Fort McMurray:

  • Wildfire is no longer an imminent threat to the community
  • Critical infrastructure is repaired to provide basic services
  • Essential services, such as fire, EMS, police and health care are restored to a basic level
  • Hazardous areas are secure—100 truckloads of fencing are being sent to Fort McMurray
  • Local government is re-established

Firefighting crews are still trying to put out fires in the northern part of the city. Fort McMurray’s airport, water treatment plant, municipal building, hospital and all functioning schools were safeguarded, according to AIR. The airport continues to be used only for wildfire aircraft operations, however, and is closed to commercial and private aircraft until further notice. Current information suggests that a total of more than 2,400 structures have been lost—roughly 10% of the total number.

AIR said its loss estimates capture residential, commercial and automobile losses, as well as business interruption losses, except those related to the oil industry. AIR derived its loss estimates based on high-resolution Industry Exposure Database (IED) for Canada and damage ratios estimated from satellite imagery and experience from claims adjustments for historical U.S. wildfires. IED exposure values included in loss estimates have been trended to Jan. 1, 2016.

The wildfires in Canada illustrate a continuing trend of increasingly severe wildfires that caused a record 10.1 million acres to be burned in the United States in 2015, surpassing the previous high of 9.8 million acres in 2006, Mark Crawford reported in last month’s issue of Risk Management. It was the fourth year in the past decade in which more than nine million acres burned. According to the U.S. Forest Service, the 2015 wildfire season was the costliest on record, with more than $2 billion spent fighting fires.

Zika and the Olympics: Business Travel Risks

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Zika
The Zika virus, and its presumed association with serious birth defects and a paralytic neurological disorder, poses an unusual problem for business leaders and risk managers. While the virus is not currently being spread by mosquitoes in the U.S., Brazil is an important destination for many U.S. business travelers, which will only increase in the build-up to this summer’s Olympic Games. For many companies, health and safety concerns are top priorities, but travel to Brazil may be a business necessity. Before making decisions around these two opposing drives, it is vital that risk managers and business leaders weigh the facts around Zika.

The Risk to Employees

Brazil ranks in the top 10 in the business travel global rankings, making it one of the world’s largest corporate travel markets. With the Olympics, business travel to Brazil is expected to increase considerably this year, yet many Americans are worried about the threats of the virus. Consider the results of a recent survey conducted by my company, On Call International: 64% of Americans and 69% of all women surveyed, said they would cancel their travel plans because of Zika. There is, however, a disparity between these widespread concerns and the ways businesses have actually responded to the virus. A survey by the Overseas Security Advisory Council found that of the 321 businesses that responded, less than 40% are allowing female employees to defer travel to affected countries, and only a fifth are allowing men to opt out. The majority of respondents are only taking steps to inform their employees about the virus.

Should more employers allow their employees to defer travel? In considering this question, business leaders need to turn to authoritative travel health sources such as the World Health Organization (WHO) and the Centers for Disease Control and Prevention (CDC) to help make informed choices around employee health and safety concerns.

Furthermore, women currently account for nearly half of all business travelers. The virus’s risks around pregnancy-related issues like miscarriages and birth defects will be top of mind for many businesswomen with travel plans to Brazil. Are employee concerns enough reason for businesses to stop travel to Brazil? Turning to authorities such as the CDC—and its recent travel advisory urging women who are pregnant or thinking of becoming pregnant to avoid travel to places like Brazil—provides a compelling reason for business leaders to consider more flexibility.

While women’s apprehensions around Zika seem obvious, the rising concern of the virus being transmitted sexually means that men with pregnant partners, or partners who may become pregnant, also have reason for concern. Notably, the CDC has issued warnings specifically for men traveling to locations like Brazil, which is another reason for businesses to give deferral of travel by men further consideration.

Duty of Care

As part of a company’s Duty of Care—the legal obligation to protect your employees from any reasonably foreseeable harm—your employees’ concerns around the Zika virus should be taken seriously. The virus is a new obstacle for businesses, and its risks require new approaches before any business travel to Zika-affected areas. Through proactive education, there are appropriate and responsible ways organizations can consider responding to the virus that are aligned with their legal and ethical responsibilities to their employees and their business. Organizations should consider meetings with all employees to discuss the virus and the health risks the virus imposes for travel.

If Travel is Necessary

While the symptoms of the virus – which are generally mild – are not immediately life-endangering, it is a good precaution to ensure employees are aware of resources such as doctors or hospitals in the areas where they are traveling. With special events like the Olympics, business leaders can also look into potential resources that are developed to help provide backup services for Rio during the Games. In preparation, Brazil is expected to invest $3.7 million in projects that include improving the medical infrastructure. These are investments that can benefit business travelers, if they have are made aware of them.

As there is no vaccine for the virus, organizations should share protection methods, including:

  • Avoid mosquitos and limit outdoor activities, especially from dawn until dusk when the Aedes aegypti mosquito is most active
  • Stay in accommodations with properly air-conditioned rooms. Netting for beds can also go a long way in protecting against the virus
  • Avoid unnecessary skin exposure by wearing long sleeves and pants
  • Purchase the correct insect spray—specifically those that contain DEET, picaridin, oil of lemon eucalyptus or IR3535

Embracing Flexibility

A sound approach includes weighing the risks and rewards of travel to Brazil and other Zika-affected areas. Where possible, be flexibile. For example, if your organization has employees based permanently in Brazil, or local partners, leverage them for any work that needs to be done in person to reduce the risks of sending additional employees to Zika-affected areas. There are also easy, technology-driven solutions, such as video chats or teleconferences. Be creative in your travel risk management solutions and identify which methods work best for your organization. Building your risk management program from a solid base of proactive education helps empower employees to make informed decisions regarding their travel plans to locations affected by Zika.

For more on this topic, check out our May feature in Risk Management Magazine.

Massive Wildfires Ravage Alberta, Canada

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oil sands, Canada
Wildfires have shut down tar sand operations north of Fort McMurray, Alberta, Canada

Drought conditions in 2015 left Alberta, Canada, parched. Combined with recent winds and high temperatures, this has led to a massive, intense wildfire in the oil city of Fort McMurray, forcing evacuation of more than 80,000 people, and burning about 1,500 homes. Authorities said there have been no known casualties from the blaze, but that fatalities were reported in at least one vehicle crash along the evacuation route.

On Tuesday, the municipality of Wood Buffalo announced mandatory evacuations and closed all southbound routes. Residents fled to safer ground north of the of the area, where they spent Wednesday night in arenas, hockey rinks and oil work camps that often ran short of supplies, Reuters reports.

The fire is now five times its initial size and spreading south, taking it farther away from the massive tar sands area. Shell Nexen, Suncor and other oil sands operators have curtailed or shut down operations to protect pipelines and help evacuate employees and nearby residents, according to the Washington Post.

The wildfires in Canada illustrate a continuing trend of increasingly severe wildfires that in the United States caused a record 10.

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1 million acres to be burned in 2015, surpassing the previous high of 9.

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8 million acres in 2006, Mark Crawford reported in last month’s issue of Risk Management. It was the fourth year in the past decade in which more than nine million acres burned. According to the U.S. Forest Service, the 2015 wildfire season was the costliest on record, with more than billion spent fighting fires.

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Environmental scientists at the Harvard School of Engineering and Applied Sciences said in 2013 that rising temperatures could lengthen wildfire seasons, increasing burn areas and smoke from fires.

Meanwhile, current weather reports for Alberta have raised hopes, as the forecast calls for cooler temperatures and possible rain.

Alberta hotspots

Houston Faces ‘Largest Flooding Event Since Tropical Storm Allison’

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Historic flooding has left the Houston metropolitan area inundated once again this week, killing at least seven people, flooding 1,000 homes and causing more than $5 billion in estimated damages in Harris County alone. Gov. Greg Abbott declared a state of disaster for nine counties in and around the Houston area. The widespread nature of the disaster prompted the city of Houston to call this the largest flood event since Tropical Storm Allison, which devastated southeast Texas in 2001, causing $9 billion in damage and $1.1 billion in insured losses.

According to Harris County Judge Ed Emmett, about 240 billion gallons of rain fell on the Houston area this week. That’s the equivalent of 363,400 Olympic-size swimming pools, CNN reported. After 10 inches of rainfall fell in six hours Sunday night into Monday, powerful, slow-moving thunderstorms had paralyzed the region Monday, but storms continued through Wednesday.

Having some of the hardest rainfall overnight helped a bit to mitigate the dangers this week. While this made it difficult to predict, it allowed people to better make choices about going out, as opposed to last year’s floods around Memorial Day, Emmett told the Houston Chronicle. Nevertheless, emergency crews made more than 1,200 high-water rescues, many residents had to evacuate to shelters, and for those who were able to shelter in place, 123,000 homes had no power at the height of the flooding. Officials have also expressed concern about two local dams that have been rated “extremely high risk and are at about 80% capacity, but they are not in immediate danger of failing.

As I wrote in Risk Management last year, the city’s rapid urbanization and approach to land development have made it extremely vulnerable to flooding perils because there is little land surface that can absorb water in foul weather. Rivers, bayous and other receptacles for runoff are easily overwhelmed and take a considerable amount of time to return to normal levels, making the heavy, concentrated, sustained rainfall seen this week even more dangerous in such an urbanized setting. Last May, record rainfall and severe thunderstorms caused tremendous damage across Texas and Oklahoma, killing 32 people and flooding more than 5,000 homes in the metro regions of Houston, Austin and Dallas.

With this latest storm, Houston again offers a powerful reminder about the natural catastrophe perils compounded by urbanization and the need to prepare, both in the form of routine disaster preparation and urban planning. From the August issue of Risk Management:

The city has invested hundreds of millions of dollars to battle the effects of urbanization. On Buffalo Bayou alone, for example, flood control efforts totaling half a billion dollars in the past decade have included bridge replacements, the addition of detention ponds for runoff, and creation of green spaces that serve as parks in normal weather while offering more land surface that can absorb water in foul weather.

But the investments are not enough. “Houston may be doing things to try to improve…but there’s a long history of pre-existing stuff that is still there,” Walter Peacock, an urban planning professor at Texas A&M and director of the school’s Hazard Reduction and Recovery Center, told Time. “Think about every time you put in a road or a mall and you add concrete—you’ve lost the ability of rain to get into the soil and you’ve lost that permeability. It’s now impermeable, and therefore you get more runoff.”