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Building Resilience, City by City

Highline park

With escalating risks and uncertainty around the globe, cities are challenged with understanding and circumventing those risks to stay vital. Much as in the business world, municipalities are moving towards resilience—the capability to survive, adapt and grow no matter what types of stresses are experienced.

Recognizing that they have much to offer each other, communities and businesses are often working together to pool their experience and knowledge. Helping to foster this is a project called the 100 Resilient Cities Challenge, funded by the Rockefeller Foundation. The project has selected 100 cities around the world and provided funding for them to hire a chief resilience officer.

“Resilience is a study of complex systems,” said Charles Rath, president and CEO of Resilient Solutons 21.

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He spoke about resilience and his experiences with the 100 Resilient Cities Challenge at the recent forum, “Pathways to Resilience,” hosted by the American Security Project and Lloyd’s in Washington, D.C. “To me, resilience is a mechanism that allows us to look at our cities, communities, governments and businesses almost as living organisms—economic systems that are connected to social systems, that are connected to environmental systems and fiscal systems. One area we need to work on is understanding those connections and how these systems work.

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Green space

Rath said that cities that have successfully implemented innovative resilient solutions have been able to “identify and communicate co-benefits. If you do some research around those jurisdictions that received funding, you’ll see interesting strategies that address their risks, but also have added economic, social and other co-benefits.”

Examples were evident after Hurricane Katrina and Superstorm Sandy. “Those communities that were able to bounce back quickest were those that had strong, socially cohesive societies. We also know that social cohesion drives economic activities in urban areas as well,” he said.

One of the first projects he worked on for the Resilient Cities Challenge was with the city of El Paso. “It is in the southwest and excessive heat is an issue they are dealing with,” he explained. “They have many parts of the city that see significant spikes in temperature, which leads to asthma, increased cooling costs and the list goes on. It’s projected over the next 70 or so years to increase 7 to 10 degrees, so it’s a big problem.”

To address the issue, he researched the issue and met with El Paso’s city manager. “We were able to pinpoint all of the different areas in El Paso where there is heat island effect,” he said. “We could tell what degree it was and roughly what was causing it.”

Causes for the escalating heat proved to be a lack of reflectivity, impermeable surfaces and lack of green space. “But it was at the point where we told him that he was costing the city about $150 million a year in increased cooling costs—because we were able to isolate the building outlines in the downtown area—that he began to pay attention,” he said. “Then we also showed him areas of the city where there was increased heat island effect where there was a significant amount of concrete. There were also a large percentage of children in the area who didn’t have access to parks.”

A solution for both dilemmas could be achieved by “transforming those vacant lots to pocket parks so that kids could have access to playgrounds.” he said, adding, “Those types of solutions with multiple co-benefits are an important element of what we are doing and this encouraged us to explore that.”

Still Time for Last Minute Hurricane Preparations

Hurricane Joaquin is threatening to hammer the East Coast this weekend. Joaquin reached Category 3 status late Wednesday and is expected to strengthen to a Category 4 on Thursday. Even if the storm veers from the East Coast, it is still expected to bring strong winds, pounding surf, heavy rain and flash flooding.

Joaquin track

While it may be late to start contingency planning, there is still plenty that can be done to minimize damage to property. For example, rooftops can be checked and needed repairs made, and fuel tanks and generators can be readied.

Zurich offers these tips for protecting commercial property. They are broken down into “easy actions” 48 hours from landfall and “tough actions”  36 hours from landfall.

Zurich preparation

Easy actions – 48 hours from landfall

About two days before a hurricane is expected to affect your location, begin implementing the easy actions. Easy actions include:

  • Review the hurricane emergency action plan with all involved personnel
  • Check building roofs. Make repairs to coverings and flashing as time allows
  • Remove all loose items from the roof, secure equipment doors and covers, and remove debris
  • Verify roof drains are clear of trash and other obstructions
  • Fill fuel tanks serving emergency generators and other vital services

Verify dewatering pumps are in service and working.

  • Verify outside storm drains and catch basins are clean
  • Remove debris from outdoor areas that may become “missiles”
  • Remove loose, outdoor, inactive equipment
  • Back up computer data
  • For healthcare, verify 96 hours of supplies are on hand
  • For manufacturing:
    • Ship out as much stock as possible
    • Verify all stock is skidded at least 4 inches above the floor
  • For new construction projects:
    • Remove loose equipment
    • Secure and protect material storage
    • Temporarily brace new construction
    • Secure roofing and items on the roof
  • For heavy industry (chemical and petrochemical):
    • Inventory tanks and vessels with enough material to secure them against the forces of buoyancy should they be exposed to flooding, surface water runoff or storm surge.
    • Maintain contact with suppliers of pipeline delivered materials. Those suppliers may also be making shutdown preparations.
    • Verify you will have the necessary supplies to safely shut down your process. This is especially important for processes such as olefins units, which take several days to bring down. Natural gas and oxygen are just two pipeline supplied materials to consider.
    • Verify compressed air supplies needed for control purposes.
    • Remove any accumulated rain water from storage tank spill containment areas.
    • Allow time for Emergency Response Team members who will remain on site to go home and take care of their personal needs. Based upon your specific needs, add to the list of easy actions, as these are just general concepts and every facility has its own requirements.

Tough actions – 36 hours from landfall

At 36 hours before anticipated landfall, time will be limited. Make sure you will have the staff needed to complete all of the tough actions, and leave plenty of time to evacuate personnel who will not be remaining on site (reference jurisdiction and/or authority’s announcements and requirements). The tough actions may include:

  • Protecting or relocating vital business records
  • Removing all loose outdoor storage or equipment
  • Anchoring portable buildings or trailers to the ground
  • Securing outdoor storage or equipment that cannot be moved
  • Installing manual protection systems (such as shutters, plywood covers and flood gates)
  • Raising critical equipment off floors (such as PC towers)
  • Moving critical equipment from basement and other below-ground areas
  • Covering critical stock and equipment with waterproof tarpaulins
  • Initiating an orderly shutdown of production equipment and systems that rely upon normal power
  • Turning off fuel gas services
  • Turning off non-essential electrical systems
  • Verifying all fire protection systems are in service (such as water supplies, fire pumps, sprinklers, fire alarms and special extinguishing systems)
  • For manufacturing:
    • Stopping incoming shipments of raw materials that will be exposed to damage
  • For heavy industry (chemical and petrochemical):
    • Removing and securing cable tray covers and controlling wiring radiant barriers. These are features that frequently become wind-borne debris when exposed to high winds.
    • Removing or securing scaffolding

Add to the list based upon your specific needs.

Tough-tough actions

There can be a few tough actions that take so long to complete they need to be started during the easy action period. Exceptional discipline will be required to make the decision to implement these very tough actions. These actions may include:

  • Setting up flood barriers at all first floor doors and entrances
  • Temporarily closing up buildings under construction to avoid entry of wind-driven rain
  • Installing manual shutters on multi-story buildings
  • For manufacturing, shutting down processes that will be exposed to damage
  • For heavy industry (chemical and petrochemical), shutting down processes that take several days to bring to a safe shutdown (such as olefins units)

It is absolutely essential to recognize when you have a tough-tough action. The overall plan must recognize their existence. And, the needed guidance and authority must be provided to those who will be charged with making the decision.

Hank Greenberg Shares Concerns for Insurance Industry at RIMS Canada Conference

Hank Greenberg RIMS canada

QUEBEC CITY, CANADA—Currently on the mend from Legionnaires’ disease, Maurice “Hank” Greenberg appeared via live video stream to deliver the keynote address to the 2015 RIMS Canada Conference. The chairman and CEO of the Starr Companies and former chairman and CEO of AIG gave a frank and diverse address highlighting a number of concerns about potential impacts to the insurance industry due to the current climate.

“We’re living in a very troubled time on a global basis,” he said, emphasizing geopolitical instability. While such geopolitical uncertainty demonstrates the need for political insurance, other widespread conditions do not necessarily have such favorable implications for the industry.

“Clearly commercial insurance rates are under pressure,” he said. “The absence of catastrophes has masked that rates have gone down so much, and that has allowed some companies to survive.”

He also noted that investment income is suffering because of interest rates, and expressed concern that many companies are turning to long-tail reserves for income. What’s more, he said, accident year results for many companies are turning negative, and many are finding their reserves inadequate, particularly as expense ratios are frequently increasing rather than remaining steady.

Companies that aren’t very efficient will find it very hard to be competitive and show returns this year, he cautioned.

Further examining the industry, Greenberg criticized insurers for “not doing a very good job of training underwriters,” seeing a stark comparison to the rigorous, diverse experience previously customary in the London market, for example.

“It takes years of experience to train an underwriter—they are not just qualified because of a college degree,” he said. “It takes years of work and a lot of common sense to develop the wisdom to know what can be underwritten and at what price.”

When it comes to this talent concern, he noted, it is not a question of which companies are doing better, but a problem across the board. “I don’t think we have the discipline, as an industry, to do the job properly,” Greenberg said.

Greenberg also shared some of his political opinions, both international and domestic.

Of China, the US-ASEAN Business Council chairman emeritus and vice chairman of the Council on Foreign Relations said he does not share the widespread dubious feelings on China. “They’ve had some missteps. What country hasn’t?” he said.

He spent some of his time addressing the burgeoning 2016 U.S. election. Greenberg noted Donald Trump’s campaign as part of what he views as growing dissatisfaction – and perhaps inadequacy – of the current political system. “People are fed up with the political system as it currently exists.

Why else would somebody like Trump, who has no experience but is speaking about things people care about be doing so well?” he said.

He also told the crowd that Jeb Bush would personally be visiting him Wednesday. Greenberg does not yet endorse any particular candidate, however, and expressed some concern about the Republican party’s position amid acute socioeconomic changes and resulting political demands nationwide.

“You have to give people the opportunity to succeed—that’s the American Dream. That’s why people came here,” he said. “If we’re going to deny that opportunity, the Republican party will have to change its name.”

Building a Better Continuity Plan for Hurricane Season

According to the Federal Emergency Management Agency, 40% of businesses do not reopen after a disaster and another 25% fail within one year. As September is not only the beginning of hurricane season, but also National Preparedness Month, the Insurance Information Institute and the Insurance Institute for Business & Home Safety have released a new infographic highlighting some of the crucial steps businesses should be taking to fortify against natural disasters.

“Businesses that plan for a disaster have the best chance of surviving, and that starts with identifying the potential risks,” said Loretta Worters, a vice president with the I.I.I. “Large businesses have risk managers, but small business owners have to be their own risk managers and, working with their insurance professional, determine the right type and amount of insurance to be able to recover from a disaster.”

“It is also critical for small business owners to create and/or update their business continuity plan and work with employees so they are prepared for the potential effects of a disaster,” said Gail Moraton, business resiliency manager at IBHS. “Taking time to do this now will save money and time later.”

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