Being prepared for, and recovering quickly from, any catastrophe is one hallmark of ensuring a more safe and resilient society. But in many catastrophe-prone communities around the globe, insurance penetration rates remain stiflingly low and, as a result, building codes are either non-existent, or inconsistently enforced. In Nepal for example, almost 90 percent of the population is without insurance, and both mitigation and recovery efforts after their devastating earthquake in April 2015 are still scaling slowly.
Working with Build Change, an earthquake engineering charity and RMS philanthropic partner, and seeing their work alongside other NGOs all helping Nepal rebuild after the 2015 earthquake, is a source of inspiration for me as I continue my sabbatical in this amazing country. To read about my initial view of the progress made in Nepal, please read my earlier blog.
It has been twelve months since I first visited Nepal, spending two weeks with Build Change, an earthquake engineering charity and RMS partner, to experience first-hand the impact that they are having in the country. Back then, Nepal was only just starting to come to terms with the huge amount of reconstruction work that lay ahead after the 2015 earthquake. While there was hope that the country could “build back better” it was going to be a long, hard road ahead, as I observed in my blog in January this year.
After my first visit, I made the decision to return to this remarkable country and volunteer with Build Change for a longer period. My ambition was to become more involved in the rebuilding work, and help Build Change plan for future post-earthquake reconstruction. Since arriving I have been struck by the contradiction that although so much has progressed, a lot of the same issues are still prevalent and are holding back real change.
On Sunday, December 26, 2004 at approximately 8 a.m. local time, a massive earthquake occurred along the Indian–Burma plate boundary off the coast of Sumatra, Indonesia. Rupturing over 1,200 km of the Sunda Trench, the magnitude of the earthquake has been estimated between M9.0 and M9.3—with the U.S. Geological Survey’s Centennial Earthquake Catalog estimating M9.1. Occurring at a fairly shallow depth—less than 30 km—the earthquake generated a basin-wide tsunami that inundated coastlines across the Indian Ocean and caused run-up waves farther afield, impacting the eastern coastline of Africa. By the end of the day, it was apparent that the event was going to emerge as one of the worst natural disasters in modern times.
Economic Toll and Recovery
Overall economic losses from the 2004 disaster were approximately $10 billion, with the majority of loss attributed to the damage in the Indonesia, Thailand, Sri Lanka, and India. The large majority of property damage was caused by the tsunami waves. Along coastlines of most of the affected countries, buildings were situated closer to sea level than is typical of higher latitudes, exacerbating the impacts.
In the aftermath of the event, the international relief efforts across the Indian Ocean were seen as fairly effective. But the longer-term recovery work in certain regions has struggled—due to the overwhelming numbers of people displaced from their homes. There are, of course, examples of well-executed reconstruction efforts. Build Change—a partner organization of RMS—has worked with tsunami survivors in Banda Aceh, Sumatra to rebuild safe, sustainable homes. Ten years after the event, evidence of the destruction wrought by the tsunami remains in the high-impacted areas.
While tsunami in the Indian Ocean have certainly occurred many times before, from the perspective of modern history, the human casualties from the 2004 Indian Ocean Earthquake and Tsunami have no historical equal. More than 225,000 people lost their lives in the disaster, with most of the loss of life occurring in the near field in Sumatra, Indonesia. In Indonesia, the tsunami destroyed virtually every village, town, road, and bridge along a 170-km stretch of coast less than 10 m above sea level. Sri Lanka’s Eastern and Southern provinces were severely impacted, with fatality rate among the population within 1 km of coast between 15% and 20%. In India, entire villages in Tamil Nadu were destroyed.
In Thailand, the tsunami affected local inhabitants and foreign tourists in the densely inhabited Phuket Island. The fatalities among the tourists were a significant proportion of the overall loss of life, as many were on the beach or in hotels near the sea at the time the tsunami waves struck. In addition, the initial tsunami wave in Phuket, which was east of the rupture, began with a receding wave. Many of the tourists (not indigenous to tsunami-prone coastal regions) were unfortunately not familiar with the nature of tsunami waves. In many (but not all) tsunami, the first movement of the sea is a withdrawal. Any occasion when the sea level recedes rapidly and inexplicably should be taken as a signal for immediate flight to higher ground.
Managing Tsunami Risk in the Aftermath
The 2004 Indian Ocean Tsunami highlighted inherent vulnerabilities in the world’s coastlines and the people who live there. Coastal populations are on the increase in many parts of the world, mostly due to the exploitation of sea resources or tourism-related activities. Adequate tsunami mitigation measures— such as tsunami warning systems, education, and land use planning—can be put in place to save lives, property, and the livelihoods of those living on the coast.
Although the impact of the 2004 disaster on the global insurance industry was minimal, it alerted the world to the dangers of tsunami hazards. Worldwide response to the 2004 disaster resulted in the establishment of the Indian Ocean Tsunami Warning and Mitigation System in 2006.
Ten years hence, the world has seen two more earthquake-induced tsunami events—in the 2010 M8.8 Maule, Chile Earthquake and in the 2011 M9.0 Tohoku, Japan Earthquake—causing many clients to inquire where else in the world can events like these happen?
I’ve just returned from the Clinton Global Initiative (CGI) annual meeting in New York. Every September, political, corporate, and non-profit leaders from around the world gather to discuss pressing challenges, form partnerships, and make commitments to action. It was inspiring to see the tremendous work already being done and the new commitments being made to address a diverse and wide range of issues, from containing the Ebola epidemic, to increasing access to education, to combatting climate change, and helping Haiti develop a self-sustaining economy.
One prevailing theme at the event this year was the importance of cross-sector partnerships to successfully tackle such complex issues. Not surprisingly, data crunched by the CGI team on commitments made over the past 10 years demonstrates the highest rate of success from partnerships vs. go-it-alone approaches.
In this spirit, we announced an RMS commitment last week to partner with the Rockefeller Foundation’s 100 Resilient Cities initiative to help increase the resilience of cities around the world. We will be making our RMS(one) platform and our catastrophe models available to cities in the 100RC network so that they can better understand their exposures, assess risk to catastrophic events as well as climate change, and prioritize investments in mitigating and managing that risk.
As the saying goes, “if you can measure it, you can manage it.” From our 25 years of experience helping the insurance industry better measure and then manage catastrophe risk, we believe there is a largely untapped opportunity for the public sector to similarly leverage exposure management and catastrophe modeling technology to establish more informed policies for managing risk and increasing resilience in cities throughout the world, both in developed and emerging economies.
It was also clear this week that the conversation in corporate boardrooms is increasingly moving from being focused solely on the financial bottom line to also having a positive impact on the world in a way that is strategically aligned with the core mission of the business.
Our partnership with 100RC, along with the partnerships with the UNISDR and the World Bank that we announced this summer, is another step in our own version of this journey. Through both our direct philanthropic support of Build Change and their admirable work to improve construction practices in developing countries and through the leveraging of our technology and the expertise of our colleagues to help the public sector, we are aligning all of our activities in support of our core mission to increase the resilience of our society.
Many of our clients have shared with us that they are on similar journeys, building on traditional support for local organizations to implement more strategic programs with broader impact and employee engagement. In particular, the insurance industry is uniquely positioned to understand the value of proactively investing in mitigation and in increasing resilience, instead of waiting until a tragedy has occurred and all that can be done is to support humanitarian response efforts.
With this common frame of reference, we look forward to increasingly partnering with our clients in the coming years not just to help them manage their own risk but to collectively help increase resilience around the world.