Exposed to natural hazards
Posted by Rebecca Hope | Graduate blog on Friday 20 July 2012, 9:00AM
As you will be aware Lloyd’s is the world’s specialist insurance market. Many of the unique and complex risks we see are high profile due to extreme natural events.
During my time within Exposure Management I have found it fascinating to discover more about these extreme hazards that the Lloyd’s market has to consider every day. I recently attended a natural hazards forum in which the catastrophes that impact risks written within the Lloyd’s market were discussed.
From this introduction to the vast and exciting world of severe weather and earthquakes it was interesting to hear how the individuals within the market have to understand and consider these dramatic events on a daily basis.
It also gave me an insight into the importance of understanding risks within a portfolio and the implication that a poor understanding of the risks within a business can have.
Due to the safe nature of the British Isles we don’t often have to worry about hurricanes, earthquakes and the majority of other natural catastrophes. However this summer has been one of the wettest in history and flooding has become a big concern to the insurance industry in the UK.
In the last two months the US has suffered huge wildfires in the western states of Colorado and Texas, which have destroyed acres of land and thousands of homes, evacuating entire communities.
At the same time the Central and Eastern States have not only suffered phenomenal heatwaves, but also a derecho (a severe and widespread straight line windstorm!). These have caused massive power failures resulting in sweltering living conditions - compounding the problem by disabling air-conditioning units in the area. This Derecho has also led to significant property damage, uprooting trees which have caused extensive losses to houses and vehicles.
On top of this, the United States is midway through the hurricane season. Insurers and scientists are constantly mindful of potential hurricanes. Tracking the turbulent weather systems that form them is vital to predicting the potential future losses they could bring.
So although the whole of the British population is complaining, and rightly so, about the complete lack of an English summer, it’s worth remembering that it’s not just us Brits who are currently feeling the force of mother nature.
