Monthly Archives: April 2018

A Tour of Kirtipur

Callum Higgins is senior product analyst at RMS, and is based in London. He joined fellow employees from RMS and RMS clients on our annual Impact Trek in Nepal during March this year. This is Callum’s account of his time in Nepal.

On the first day of the Impact Trek, we were based at Build Change’s office in Kathmandu, hearing about the various projects the charity is working on in Nepal from Jessica Stanford (Housing Reconstruction Program Manager), as well as the technological innovations Build Change is using to increase the efficiency of their work from Adam McDonald (New Frontier Technology Architect). For day two, the Impact Trekkers were keen to get out of the office and into the city to examine some of the typical property construction in the region and the challenges that Build Change faces in making a greater proportion of these safe from earthquakes.

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Rural Retrofitting in Nepal With Build Change

Christopher Allen is senior analyst – model development, working within the Event Response team at RMS, and is based in London. He joined fellow employees from RMS and RMS clients on our annual Impact Trek in Nepal during March this year. This is Chris’s account of his time in Nepal.

On Wednesday, March 21, eight somewhat-still-jetlagged RMS Impact Trekkers left the Summit Hotel in Kathmandu bound for the village of Dhunkharka, three hours’ drive southeast of the capital. We were going to see some of the retrofitting work that was being done by Build Change, a social enterprise partner of RMS that aims to build local capacity for safer construction practices. As we weaved our way through Kathmandu traffic (a chaotic affair at the best of times) we noticed several of the characteristics of the capital’s buildings that had been pointed out to us by Build Change over the past few days: soft story, three-floor brick masonry, new construction sprouting up with reinforced concrete columns, the occasional ground floor still occupied by goats or buffalo…

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Pete Cormier: Impact Trek in Nepal

Pete Cormier is a lead cat analyst for Liberty Mutual, and joined employees from RMS on our annual Impact Trek in Nepal during March this year. This is Pete’s account of his time in Nepal.

In March 2018, I spent 10 days with a team in Nepal at the invitation of RMS to volunteer with Build Change, a non-governmental organization (NGO) which is helping the re-building efforts following the April 2015 earthquake. The massive Mw7.8 earthquake caused approximately 9,000 deaths, 22,000 injuries and damaged more than one million homes, schools, and businesses at a cost of US$10 billion, which is about 50 percent of Nepal’s annual GDP (Source: Wikipedia).

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My Nepal Impact Trek Diary

 

Lusi Huang is a risk engineer for Chubb North America, and joined employees from RMS on our annual Impact Trek in Nepal during March this year. This is Lusi’s trek diary.

Day 1: Sunday, March 18

One of the first things that strikes me when arriving in Kathmandu, the capital of Nepal, is that the traffic is just like a bowl of spaghetti, a true jumble — there’s no traffic lights, no center line, all uneven road surfaces. Life in Kathmandu means that you just need to be patient. Another initial observation, solar power is big here, surprisingly there are a large amount of solar electricity and solar hot water panels installed on the roofs of Kathmandu domestic houses.

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Join Us for Must-See Keynotes and Up Close Sessions at Exceedance 2018

With Exceedance 2018 coming May 14 – 17, we have lined up an interesting group of keynote speakers who will be onstage to provide their insights, ideas and inspiration. This year’s topics include:

Day 1: Earth, Wind and Fire

Our day one general session will focus on how we have leveraged lessons learned to bring new advances in model science and technology that enable (re)insurers to better manage and capitalize on catastrophe risk:

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Reimagining the 1918 Pandemic

Ask any child, a world without Walt Disney would be unimaginable. Born in December 1901, Walt was sixteen years old when he caught the 1918 pandemic influenza — and survived. A century has passed since the great 1918 pandemic, in which tens of millions died, the deadliest in history. When an anniversary of a major event comes round, we can ask what if the event were to occur today.

Catastrophe modelers can also reimagine the event being different from what it actually was. This counterfactual perspective leads to important insights into pandemic risk, which have only recently emerged from virological research.

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Earthquakes in Oklahoma: An Update on Induced Seismicity Hazard and Risk for 2018

During 2017, Oklahoma and southern Kansas experienced Mw 3+ earthquakes more frequently than in California. Although the annual count of earthquakes in the Oklahoma/Kansas area has declined since peaking in 2015, the rate of earthquake occurrence is still extremely high. More than 50 events (Mw 3+) have occurred since the start of 2018, including events of Mw 4.6 and Mw 4.5 during the first weeks of April, with shaking strong enough to be felt in Oklahoma City.

In Oklahoma and other parts of the Central and Eastern United States, research studies have linked the increased occurrence of earthquakes to oilfield wastewater injection. Damage has mostly been minimal, but the ground shaking occurring from events greater than or equal to Mw5 could have produced extensive damage had comparable events occurred in more greatly populated areas of the state.

In 2016, the United States Geological Survey (USGS) released their first short-term forecast for seismic hazard — this was meant to capture the increased (but potentially transient) nature of this hazard, and the forecast emphasized that the seismic hazard in Oklahoma is comparable to that of California. Since the first one-year forecast in 2016, the USGS has released subsequent forecasts for 2017 and now for 2018.

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Towards a Resilient Insurance Market

This blog was originally published on InsurTech Gateway by Hambro Perks, click here for the original blog.

 

It is a fascinating time to work in the risk analytics business.

Traditional risks are changing, with much of this change being driven by technology. From the challenges posed by autonomous vehicles to the rapid digitization of the “smart home”, with automatic detection of threats such as fire and theft, systems are getting smarter and risks are changing.

Other types of traditional risk however still offer tremendous opportunities — last year’s storms in the U.S. have shown that even in one of the world’s most established insurance markets, uninsured losses are still a major problem. Barely half of the losses from Harvey, Irma and Maria were insured — the rest lies with the uninsured victims of the disaster, or if they are lucky, with the federal government who will help them rebuild.

This “protection gap” between those who have adequate insurance and those who do not, represents both a huge societal challenge, and a massive opportunity for the insurance market.

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Enter the Centre

On July 8 last year, the U.K. Prime Minister, Theresa May, announced her intention to establish the Centre for Global Disaster Protection.

The big idea: capitalize on the City of London’s expertise in financial services in order to help the governments of developing countries become more resilient to natural disasters, using risk transfer, where appropriate, to avoid humanitarian crises and augment disaster aid.

Later that month, Lord Bates, the U.K. Government Minister of State for International Development, shared more color on the Centre’s remit. Addressing the International Insurance Society, he explained:

“It is about investing in the data, research and cutting-edge science to analyze risk and design systems that work well for the poorest people. It is about providing training and sophisticated analytics.

It is about pre-disaster planning, including bringing vulnerable people into the dialogue on how support should flow in an emergency.

It is about providing neutral advice — supporting countries in making decisions about which financial instruments are right for them.

It is about innovation — looking at new ways of working and building new collaborations across the finance and humanitarian communities, to design financial instruments that work for developing countries.”

Lord Bates’ address also highlighted the analytical role RMS played in the U.K. Government’s decision to create the Centre.

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New Opportunities for Investors Willing to Embrace the “Resilience Gap”

This is a reprint of a “Trading Room” interview from Trading Risk magazine, please click here to visit the magazine website.

 

Opportunities abound for investors willing to embrace the resilience gap, according to RMS global managing director Daniel Stander

How does the Protection Gap offer opportunities for investors?

I’m afraid you’ve pushed one of my buttons with your very first question! I’ve been trying (unsuccessfully it seems) to move the debate away from the “protection gap”. I much prefer to talk about the “resilience gap”. This isn’t me being a pedant. The language we use here is important. Framing the problem in terms of “protection” grounds the debate in risk-transfer solutions.

But we all know that risk capital alone cannot address the fact that communities all over the world are frequently brought to their knees by the impacts of extreme events. Risk financing is no silver bullet. Those at risk — from the individual homeowner to the elected official governing a sovereign state — need much more than just contingent capital to materially increase their resilience to acute shocks. They need to develop a deeper understanding of the risks they face — and how it compares to their desired ability to withstand extremes.

More than that, they need to understand what interventions offer an acceptable ROI — from enforcing building codes to preserving nature-based defenses. And then of course they need to be prepared to respond effectively when the ground shakes or the wind blows, lest the economic impacts escalate. Opportunities abound for investors – but they will only be seized by those who can embrace the totality of the “resilience gap” and position their risk capital in the totality of the need.

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