March

2011
Allianz Risk Pulse
Focus: Natural Catastrophes
Natural catastrophes on the rise?
Analysis of the potentially increasing threat from natural catastrophes worldwide
,
Recently the world has witnessed a string of natural ca-
tastrophes, from earthquakes in Haiti, Chile, ew !ealand
and "apan, to floods throughout #urope, Pakistan and Australia$
%t would seem as though the num&er and se'erity of natural
catastrophes has increased$ (ut is that really true) An analysis
from Allianz e*perts from reinsurance, corporate insurance and
economic research gi'es a more nuanced picture$
The a!istan floods in August 2010 were the worst in li"ing memory,
affecting millions of people and leading to o"er 1,#00 deaths$ Floods
in the C%ech &epu'lic, oland, (ungary, )lo"a!ia and *ermany later
that year, led to only a handful of fatalities 'ut caused losses of tens
of millions of euros$
+eanwhile, the ,celandic "olcano that erupted on +arch 21, 2010
sent an ash cloud o"er western -urope for nearly a month$ ,t caused
little physical damage or losses for property insurers, 'ut its disrup.
tion to air traffic led to significant losses to the tra"el industry and
tra"el insurers as well as supply chains$
/Terri'le e"ents li!e ma0or natural catastro.
phes illustrate the "alue and importance
of insurance to society$ Now is the time to
help people,1 says Clement 2$ 2ooth, 2oard
mem'er of Allian% )-
The earth3ua!e in 4apan on +arch 11, 2011, with a magnitude of 5$0
was the fourth.largest worldwide on record and triggered a series
of further e"ents$ ,t has claimed thousands of li"es and will 'e "ery
e6pensi"e for 4apan, glo'al mar!ets and the insurance industry 7 not
only from claims arising directly from the disaster 'ut also from so.
called contingent 'usiness interruption losses$ These !ind of losses
arise for e6ample where production is interrupted at a manufacturer
due to non.deli"ery of parts from a supplier which has 'een directly
affected 'y the e"ents in 4apan$ Contingent 'usiness interruption
claims may end up much higher than the original physical losses$
Allianz Risk Pulse 7 Focus: Natural Catastrophes page +
,he largest 'ersus most fatal earthquakes in -... / -.++
0ear Region Magnitude #nergy factor 1atalities
2011 "apan (March 11) 9.0 n.a. n.a.
2010 Chile (Feb 27) 8.8 507
501
Haiti (Dec 1) 7.0 222,570
2009 2amoa %slands (Sep 29) 8.1 192
8
2outhern 2umatra (Sep 30) 7.5 1,117
2008 2ichuan, China (May 12) 7.9 n.a. 84,000
2007 %ndonesia (Sept 12) 8.5 25
5.5
Peru (Aug 15) 8.0 514
200 3uril %slands (!"# 15) 8.3 0
1000
"a'a, %ndonesia (May 2) .3 5,749
2005 orthern 2umatra (March 28) 8. 1,313
32
Pakistan ($ct 8) 7. 80,31
2004 orthern 2umatra (Dec 2) 9.1 n.a. 227,898
2003 Hokkaido, "apan (Sep 25) 8.3 0
355
%ran (Dec 2) . 31,000
2002 Alaska (!"# 3) 7.9 0
501
Afghanistan (Mar 25) .1 1,000
2001 Coast of Peru (%une 23) 8.4 138
11
%ndia (%an 2) 7.7 20,023
2000 Papua ew 4uinea (!"# 1) 8.0 2
1.5
%ndonesia (%un 4) 7.9 103
)ource: Allian%
&he 'nergy (act"r )h"*) the rat+" bet*een the )e+),+c energy re-ea)e. by the
t*" earth/ua0e). F"r e1a,p-e, the /ua0e +n 2h+-e re-ea)e. 500 t+,e) ,"re
energy than the /ua0e +n 3a+t+. &h+) tab-e )h"*) that th")e reg+"n) *here
tect"n+c p-ate) c-a)h are at h+ghe)t r+)0. S+1 tre,en."u) earth/ua0e) happene.
+n 4n."ne)+a +n the -a)t .eca.e. A-- "ther earth/ua0e) +n th+) tab-e 5 e1cept 3a+t+
5 are a-)" +n h+gh6r+)0 7"ne). &he a,"unt "( energy re-ea)e. ."e) n"t nece))ar+-y
,ean ,"re .a,age "r ca)ua-t+e). 4n)tea., *ea0 bu+-.+ng) "r )ec"n.ary e((ect)
"( earth/ua0e) )uch a) t)una,+) "r (+re) are the ,")t c",,"n rea)"n ("r h+gh
(ata-+ty rate). &h+) *a) the ca)e +n 3a+t+ +n 2010, +n !"rthern Su,atra +n 2004 an.
*+-- pr"bab-y be the ca)e ("r %apan.
Markus ,reml, seismology e*pert at Allianz 2# Reinsurance
Allianz Risk Pulse 7 Focus: Natural Catastrophes page -
%nsured losses increasing dramatically
in 'n 8)9
in 'n 8)9
:# :#
:0 :0
;# ;#
;0 ;0
2# 2#
20 20
1# 1#
10 10
# #
0 0
15<0 715<5 15=0 715=5 1550 71555 2000 72005 2010 72015
&h+) graph )h"*) the .ra,at+c +ncrea)e "( a#erage +n)ure. c-a+,) per .eca.e. )ource: Allian%
>ithin a wee! of its occurence "arious e6perts ha"e put out their
estimates of the losses$ Catastrophe modeller -?-CAT estimated that
total insured losses would range 'etween 8)912'n and 8)92#'n,
while ris! modelling agency A,& >orldwide has put the insured 'ill at
'etween 8)91#'n and 8)9;#'n$ )ome analysts ha"e suggested that
the cost of the earth3ua!e to the glo'al insurance industry could 'e
o"er 8)9@0'n$ >hile these estimates are informed speculation,
Allian% and the insurance industry feel that it is too early to confirm
total insured losses, they do indicate the huge scale of potential
financial damages associated with this e"ent$
4apan is situated in a seismically "ery acti"e region, so earth3ua!es
there ha"e 'een a common ma0or catastrophe, says +ar!us Treml, a
seismology e6pert at Allian% )- &einsurance$ Tremors are fre3uently
accompanied 'y tsunamis and large.scale fires$ As a result, /insurers
use earth3ua!e ris! models regularly to calculate the pro'a'ility of
the damages that they insure against$ The tsunami and fires must 'e
e6amined relati"e to their actual occurrence,1 says Treml$
Millions of earthquakes
The 8) *eological )ur"ey A8)*)B estimates that /se"eral million1
earth3ua!es occur worldwide each year, a'out 20,000 of which are
located 'y its National -arth3ua!e ,nformation Center$ /(owe"er,
the num'er of large 3ua!es 7 those with a magnitude @$0 or greater
7 has stayed relati"ely constant,1 adds +ar!us Treml$ ,n his "iew, the
u'i3uitous media co"er also supports the impression that there is
an increase of natural catastrophes worldwide$ />e see images and
"ideos of the e"ent within seconds on CouTu'e, Twitter or Face'oo!$
This ma!es catastrophes more real for us, no matter where we are$1
adds +ar!us Treml$
>hile the 8)*) recorded twenty.two earth3ua!es with a magnitude
a'o"e < in 2010, all 'ut a few thousand of the recorded 22<,000
fatalities from that year came from the ma0or 3ua!e that hit (aiti on
4anuary 12, 2010$ The largest earth3ua!e recorded that year was the
magnitude.=$= earth3ua!e that hit offshore 2io.2io, Chile, on Fe'ru.
ary 2<$ ,t !illed more than #00 people, with a'out half of those deaths
&h+) p+cture *a) ta0en by 8ay 3"gen.""rn,
3ea. "( A92S c-a+,) genera- a.:u)ter), *hen he
*a) regu-at+ng c-a+,) +n 2h+-e +n March 2010
Allianz Risk Pulse 7 Focus: Natural Catastrophes page ;
caused 'y a tsunami it triggered$ >hile the energy released 'y this
earth3ua!e was more than #00 times the one that struc! (aiti, fatali.
ties were far fewer due to strict 'uilding codes in Chile dating 'ac!
to 15;# Aand most recently re"ised in 200;B and lower ma6imum
sha!ing intensities$
D"er the past :0 years, climate or weather.related insurance claims
ha"e increased dramatically$ According to Allian%, a"erage insured
claims per decade ha"e risen from less than 8)9#'n during the
15<0s and 15=0s, to o"er 8)9:0'n 'y 2010$
/Clients all o"er the world, catastrophes all
o"er the world: Allian% *lo'al Corporate E
)pecialty is used to managing large losses
where"er they happen$ )till any disaster
poses new challenges to the claims orga.
ni%ation and of course the client always
comes first$/ A6el Theis, C-D of Allian%
*lo'al Corporate E )pecialty
+ost insured catastrophe losses are concentrated in the 8) and
-urope A@0F and 2=F respecti"elyB$ This is 'ecause natural catastro.
phes ha"e an enormous effect on areas where there are dense popu.
lations and large structures, and some of the worldGs most populous
areas are located in areas of high seismic acti"ity or on coastal areas
that are prone to flood and hurricane ris!s$ As insurance co"er has
grown for the rapidly e6panding num'er of residential and
'usiness properties 'ased in these locations, so too has the num'er
of claims and payouts$ Accordingly, the most e6pensi"e insurance
claims ha"e come from de"eloped countries where insurance
mar!et penetra. tion is "ery high for 'oth residential and 'usiness
property$
3atrina and her si&lings
The highest financial losses in recent years ha"e occurred in the
8nited )tates$ (urricane Hatrina in 200# was the third.strongest hur.
ricane to ha"e e"er reached the 8) and the most e6pensi"e natural
catastrophe e"er, with an insured loss of some 8)9@0'n$ Nearly
2,000 people are 'elie"ed to ha"e died in the storm, and more than
one million *ulf Coast residents were forced to relocate$ 8p to =0F of
the city of New Drleans was flooded$ The 8) also saw the insurance
industryIs 'iggest.e"er earth3ua!e loss following the 155: North.
ridge, California earth3ua!e which cost insurers 8)91#$;'n$
According to a 0oint >orld >ide Fund for Nature A>>FB and Allian%
sur"ey released in No"em'er 2005 called +a0or Tipping oints, the
8) is at ris! of e"en worse natural disasters as a result of rising sea
le"els through climate change and increased ur'anisation$
According to the sur"ey, a rise in the sea le"el of 1#cm on the
north.east coast of the 8) would in effect mean a rise in sea le"el of
@#cm in cities such as 2altimore, 2oston, New Cor!, hiladelphia and
ro"idence$ )uch a rise in sea le"el would potentially increase asset
e6posure from a current estimate of 8)91,;#5'n to 8)9<,:2#'n$
The critical issue is the impact that a hurricane could ha"e in the New
Cor! region 7 potentially, the cost could 'e 8)91 trillion at present,
rising to o"er 8)9# trillion 'y the mid.century$
(andling the claims process
,
Andreas )hell, head of short.tail claims at Allian% *lo'al Corporate E
)pecialty, says that while there is a /standard1 claims process, each
crisis has its own special features, which claims ad0usters need to adapt
to$ For e6ample, in the case of the 4apanese earth3ua!e, insurers need
to ta!e into account the effect of the tsunami, as well as the danger of
radioacti"e lea!s from Fu!ushima Jaiichi nuclear plant$ resently, claims
ad0usters are una'le to "isit the hardest hit areas$
)hell says that a !ey part of the process in"ol"es teams wor!ing with the
client to de"elop or enact contingency plans and locate alternate suppliers
or alternate transport routes to ensure that the financial loss remains low$
&ay (ogendoorn, the head of A*C) claims general ad0usters, says that /the
'asic concern is maintaining cash flow$ ,f a client needs
an ad"ance payment to maintain that for their local company, we ma!e
those funds a"aila'le$ 2ut money as such is not the primary thing they are
turning to us for 7 staying in 'usiness is$1
)hell says that in terms of marine transport, claims for hull losses will
come more 3uic!ly than cargo losses due to the complications around
cargo not 'eing deli"ered to or shipped from 4apan$
/A"iation claims are li!ely to 'e limited to hull damage to aircraft on the
ground and damages to spare parts located in destroyed warehouses$1
adds Ale6ander +ac!, head of long.tail claims at Allian% *lo'al Corporate
E )pecialty$
Ale6ander +ac! does not e6pect many lia'ility claims as the e"ent will
'e classed as a force ma0eur$ /Third.party claims 'ased on losses caused
'y such an Act of *od are generally e6cluded from legal lia'ility or not
insured,1 says +ac!$ /2ut as we ha"e seen after Hatrina, in the aftermath
of such a catastrophe all !ind of lia'ility claims will 'e raised 'y indi"idu.
als, companies and su'rogating insurers,1 he adds$
$n March 11, 2011, at 5.4 ;&2 an earth/ua0e "( 9.0 ,agn+tu.e "ccure. near
the 'a)t 2"a)t "( 3"n)hu, %apan. A .e#a)tat+ng t)una,+ an. ,any a(ter)h"c0)
("--"*e..
,ncreased e6posure to natural catastrophes in regions li!e the 8) and
-urope are forcing insurers and reinsurers to loo! at new ris! models,
issue cat 'onds, re"iew pricing structures and consider possi'le
deducti'les and e6clusions in their policies$ (owe"er, the industry also
faces difficult challenges when assessing natural catastrophe ris!s and
lia'ilities in de"eloping regions such as )outh America and Asia, par.
ticularly as the population in 'oth regions is set to grow rapidly$ The
8nited Nations, for e6ample, says that there will 'e nearly ;$# 'illion
people li"ing in AsiaGs cities 'y 20#0, compared to 2;0 million in 15#0$
,he rise of Asian risk
)cott &yrie, C-D of Allian% )- &einsurance 2ranch Asia acific, points
out that cities li!e 2ei0ing, Jelhi, 4a!arta, +anila, +um'ai, )hanghai
and Taipei are all situated in earth3ua!e %ones and are also at ris!
from flooding or typhoons$ ,n the hilippines, for instance, @2 of the
<5 pro"inces are regularly hit 'y tropical cyclones, with de"astating
conse3uences$ ChinaGs seismic /danger %one1 co"ers roughly half the
country$
/,n comparison to the 8), due to the far higher population 'ase, Asia
is #50 times more "ulnera'le to earth3ua!es, @2 times more "ulner.
a'le to flooding, and :0 times more "ulnera'le to tropical cyclones,1
says &yrie$ -"en those with low e6posures to catastrophes can 'e hit
une6pectedly and se"erely, he says, as pro"ed 'y the tsunamis that
de"astated countries 'ordering the ,ndian Dcean on Jecem'er 2@,
200:$ /(ence, Asia stands to lose much more from natural disasters
as further ur'anisation occurs1 he adds$
/,nsurers and reinsurers ha"e a peculiar pro'lem in de"eloping mar.
!ets,1 says &yrie$ /Dn the one hand, there is enormous potential for
selling products and ser"ices in growth mar!ets$ The downside is that
the industry could 'e pro"iding co"er for enormous ris!, particularly
as the growth of residential and commercial property is not lin!ed
to any impro"ement in 'uilding standards or a'ility to withstand
seismic shoc!s or strong winds,1 he says$
For e6ample, when Typhoon Nari hit Taipei in 2001 at a relati"ely
low wind speed, it caused 8)9#00mn worth of damage$ (ea"y
rainfall flooded the su'way networ! after the pumping system
failed$ The main traffic arteries in and out of the capital were
paraly%ed for wee!s$ The Taiwanese go"ernment su'se3uently
spent NT@'n A8)J
915=mnB on a flood di"ersion pro0ect to mitigate the damage in the
Heelung &i"er 'asin$ This pro0ect has 'een "ery successful and dem.
onstrates how planning can help reduce the effect of floods$
&yrie says that the insurance industry needs to further de"elop
information standards and ris! assessment tools$ /There is "ery little
historical data in Asia with regards to how 'uildings are constructed,
whether they ha"e the necessary planning permission, and if they
comply with accepted 'uilding standards$ As a result, there is a
danger that insurers are pricing ris! without full !nowledge and are
therefore ta!ing more catastrophe ris! onto their 'oo!s$ Added to
that, ris! modelling firms ha"e much wor! to do in this area, since
e6posure data is underde"eloped$1
Addressing all risk factors
The main factor 'ehind increasing insured losses is, "ery simply, eco.
nomic growth$ roperty "alues rise and areas of population density
e6pand, often in highly at.ris! areas$ At the same time, the insurance
density in these areas is increasing$ There is also a lin! 'etween hu.
man acti"ity and climate change, which will ha"e an impact on storm
"olatility, flood acti"ity and on water le"els and coastal regions$
/Allian% is following all the factors that lead to increased claims from
natural catastrophes "ery closely,1 says Armin )andhK"el, C-D af
Allian% Climate )olutions$ /,n addtion to ris! analysis data, we com.
mission scientific studies and closely wor! with our clients to 'etter
The economic impact of the 4apanese disaster
,
-"en months after the 4apanese earth3ua!es and tsunami, it will
remain difficult to precisely estimate the economic impact of the
catastrophe$ There is little dou't, howe"er, that the longer that radiation
lea!s from the Fu!ushima Jaiichi nuclear plant, the worse the prospects
are for a 3uic! economy reco"ery$
Thomas (ofmann, an economist at Allian% )- -conomic &esearch and
Corporate Je"elopment, stresses that any assessment needs to loo!
at two scenarios$ /,f the radiation lea! can 'e contained and !ept away
from the large ur'an centers, and power outages do not last for se"eral
months, nationwide economic acti"ity in 4apan will li!ely 'e a'le to pic!
up soon and there will 'e limited o"erall 'usiness interruption$1
/Dn the other hand, if radioacti"ity were to spread further across the
country, this would create ma0or economic difficulties$ Large areas of
national production would come to a standstill$ )uch a scenario would 'e
characteri%ed 'y ongoing support measures from the central 'an! and
financial assistance from the state$ *o"ernment de't would soar$1
)uch a scenario could lead to a slowdown in manufacturing, particularly
in the automoti"e and electronics industries, which depend on compo.
nents supplied 'y 4apanese firms, says (ofmann$ Foreign 'uyers would,
howe"er, try 3uic!ly to source materials from other suppliers and loca.
tions$
/+a0or catastrophes li!e earth3ua!es always
wrea! ha"oc on the economy$ Factories
and 'usinesses are closed down, normal
consumption patterns grind to a halt$ (ow.
e"er, e"entually a ma0or disaster can ha"e a
positi"e or catalytic effect, too$ Dnce disaster relief gets
under way and funds flow in, the reconstruction effort
generates new growth and pro"ides 'usiness oppor.
tunities for industry sectors li!e engineering, 'uilding
or transportation$1 +ichael (eise, Chief -conomist at
Allian% )-
understand all implications$ Climate change is the factor that needs
to 'e most closely studied, since its implications on the future situa.
tion are the most difficult to assess$1
,n order to support the growth of prosperity worldwide, insurers will
continue to consider new forms of co"er and e6panding their pres.
ence in emerging mar!ets$ Allian% will also continue to partner with
policy ma!ers and industry to further de"elop safety codes and tac!le
climate change worldwide$
2-e,ent <. <""th +) a b"ar. ,e,ber "( A--+an7 S'.
A1e- &he+) +) 2'$ "( A--+an7 9-"ba- 2"rp"rate = Spec+a-ty.
Sc"tt 8yr+e +) 2'$ "( A--+an7 S' 8e+n)urance <ranch A)+a >ac+(+c.
Ar,+n San.h?#e- +) 2'$ "( A--+an7 2-+,ate S"-ut+"n).
Mar0u) &re,- +) a natura- cata)tr"phe r+)0 e1pert at A--+an7 S' 8e+n)urance.
,nteresting Facts and Common +yths a'out -arth3ua!es
Markus ,reml, seismology e*pert at Allianz 2# Reinsurance, knows
almost e'erything a&out earthquakes$ Apparently, there are
many misconceptions and common myths a&out this fascinating
and sometimes horri&le natural phenomenon$
,
The epicenter is not necessarily the point where the intensity of an
earth3ua!e is highest$ Jamage can 'e much greater some distance
away from the epicentre 7 depending on a multitude of factors including
seismic "ulnera'ility of 'uildings or the soil they are 'uilt on$
,
Although it may seem otherwise: earthquakes are not on the
increase$ ,n fact, earth3ua!es of magnitude <$0 or greater ha"e
remained fairly constant$ (owe"er, during the last 20 years there has
'een an increase in the num'er of earth3ua!es /located1 'y the
increasing num'er of seismograph stations and impro"ing glo'al
communications$
,n the past, many more earth3ua!es were 'arely noticed or reported only
in small local newspapers$ Today, pictures or "ideos are on the internet
minutes after a 3ua!e$ ,n addition, in most earth3ua!e prone areas the
population and the e6posed "alues ha"e increased, sometimes signifi.
cantly$
,
#arthquakes do not only occur at ma5or seismic fault lines,
which is where tectonic plates meet each other$ There are also
faults within plates, some of which are 'uried and not !nown until an
earth3ua!e occurs on them and re"eals their location$ +oreo"er, these
earth3ua!es tend to occur infre3uently with long periods of 3uiescence$
All this ma!es seismic ha%ard assessment for intra.plate regions such as
central -urope and the eastern 8)A "ery difficult$
,
#arthquakes as geological phenomena are not affected &y
climate change$ Dnly in "ery special cases can weather Aand thus
climateB related e"ents li!e torrential rains cause or increase the occur.
rence of earth3ua!es$ ,n general, the long.term geological processes that
lead to earth3ua!es happen independently from processes in the earthGs
atmosphere$
,
#arthquakes cannot &e predicted$ A real prediction, which would
gi"e the Ae6actB time, location and magnitude of an earth3ua!e is
not possi'le$ >hat seismologists can do is a systematic seismic ha%ard
assessment to determine the strength of seismic sha!ing for a gi"en
pro'a'ility$ This is the 'asis for esta'lishing appropriate seismic 'uilding
codes that can 7 if properly enforced 7 pre"ent 'uilding collapse and loss
of li"e$ Authorities can also use these studies to de"elop emergency plans
for an effecti"e disaster response 'ased on realistic earth3ua!e scenarios$
,
opular 'elief says, that the higher the magnitude Aoften
referred to as /&ichter scale1B, the higher the damage$ ,his is not
neces-
sarily true6 again, damage depends on "ulnera'ility of 'uildings, the soil
they are 'uilt on, on earth3ua!e depth, and on whether the earth3ua!e
occurs in a place where much damage can 'e done$ +any strong earth.
3ua!es create little damage, 'ecause they occur under the oceans or at
great depths within the earth$
,
)ometimes people say that there is such a thing as 7earthquake
weather8 or 7earthquake season8$ (owe"er, the occurrence of
earth3ua!es is randomly distri'uted o"er the year and throughout a day$
The tectonic processes ha"e a much longer timescale than a day or a year
and are not influenced 'y atmospheric processes$ >hat does change,
'ased on the season or time of day, is the num'er of fatalities and the
amount of damage$ At night most people are asleep, during rush.hour
they are on the streets and during the day they are at their wor!places 7
and their e6posure to earth3ua!e effects changes considera'ly$
9here the ground shakes / 4lo&al 2eismicity
&he g-"ba- earth/ua0e act+#+ty (r", 1973 t" 2003 )h"*) a c-ear a-+gn,ent a-"ng the b"un.ar+e) "( the tect"n+c p-ate). @h+-e b-ac0 p"+nt) repre)ent earth/ua0e) +n the
cru)t, the c"-"ure. p"+nt) )tan. ("r .eeper earth/ua0e) that "ccur *hen "ne p-ate )+n0) +nt" the earthA) ,ant-e (+t B)ub.uct)C). 3"*e#er, a) can be )een +n 'ur"pe an. the
'a)tern ;SA, earth/ua0e) can a-)" "ccur *+th+n the p-ate). Markus ,reml, seismology e*pert at Allianz 2# Reinsurance
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:argest atural Catastrophes +;<.--.++
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Natural Catastrophe reparedness
atural catastrophes do happen, and their effects can &e great / potentially e*treme$
umerous studies ha'e shown that a remarka&le num&er of companies or indi'iduals don=t
ha'e adequate / or any / disaster preparedness plans in place$
/A few precautions can help protect you
from serious losses and disruptions in
the e"ent of a natural catastrophe,1 says
Lyman +unson, "ice president of ris!
ser"ices at FiremanIs Fund ,nsurance
Company$ /rotecting your home is "ital to
!eeping your family safe and comforta'le$1
A--+an7 *a) a ,a:"r +n)urer "( the San Franc+)c" earth/ua0e +n 190. >+cture.
here +) the "((+ce bu+-.+ng "( F+re,anA) Fun., *h+ch t".ay +) part "( A--+an7 9r"up.
&+p) byE A--+an7 9-"ba- 2"rp"rate = Spec+a-ty an. F+re,anF) Fun..
Pu&lisher
Allian% )-, Allian% )- &einsurance, Allian% *lo'al Corporate E )pecialty
Allian% )-, HKniginstr$ 2=, =0=02 +unich, *ermany
u'lished in +arch 2011
D"erall responsi'ility: Haterina iro, *roup Communications
-ditorial Team: Neil (odge, &ichard +anson, Anni!a )chQnemann,
Hatharina +auer, Carl Jill, 2irgit Hressin, Loren% >eimann, 4anet &ui%
:inks
Contacts
(ugo Hidston
*lo'al (ead of Communications
Allian% *lo'al Corporate E )pecialty
(ugo$HidstonRallian%$com
S::$20;$:#1$;=51
Haterina iro
*roup Communications
Alllian% )-
Haterina$iroRallian%$com
Christiane +er!el
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,hese assessments are, as always, su&5ect to the disclaimer pro'ided &elow.
Cautionary note regarding forward-looking statements6 &he )tate,ent) c"nta+ne. here+n ,ay +nc-u.e )tate,ent) "(
(uture e1pectat+"n) an. "ther ("r*ar.6-""0+ng )tate,ent) that are ba)e. "n ,anage,entF) current #+e*) an. a))u,pt+"n)
an. +n#"-#e 0n"*n an. un0n"*n r+)0) an. uncerta+n6t+e) that c"u-. cau)e actua- re)u-t), per("r,ance "r e#ent) t" .+((er
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"( c"nte1t, the *"r.) B,ayC, B*+--C, B)h"u-.C, Be1pect)C, Bp-an)C, B+nten.)C, Bant+c+pate)C, Bbe-+e#e)C, Be)t+,ate)C, Bpre.+ct)C,
Bp"tent+a-C, "r Bc"nt+nueC an. )+,+-ar e1pre))+"n) +.ent+(y ("r*ar.6-""0+ng )tate,ent). Actua- re)u-t), per("r,ance "r e#ent)
,ay .+((er ,ater+a--y (r", th")e +n )uch )tate,ent) .ue t", *+th"ut -+,+tat+"n, (+) genera- ec"n",+c c"n.+t+"n), +nc-u.+ng +n
part+cu-ar ec"n",+c c"n.+t+"n) +n the A--+an7 9r"upF) c"re bu)+ne)) an. c"re ,ar0et), (++) per("r,ance "( (+nanc+a- ,ar0et),
+nc-u.+ng e,erg+ng ,ar0et), an. +nc-u.+ng ,ar0et #"-at+-+ty, -+/u+.+ty an. cre.+t e#ent) (+++) the (re/uency an. )e#er+ty "( +n6
)ure. -")) e#ent), +nc-u.+ng (r", natura- cata)tr"phe) an. +nc-u.+ng the .e#e-"p,ent "( -")) e1pen)e), (+#) ,"rta-+ty an. ,"r6
b+.+ty -e#e-) an. tren.), (#) per)+)tency -e#e-), (#+) the e1tent "( cre.+t .e(au-t), (#++) +ntere)t rate -e#e-), (#+++) currency e1change
rate) +nc-u.+ng the 'ur"G;.S. D"--ar e1change rate, (+1) chang+ng -e#e-) "( c",pet+t+"n, (1) change) +n -a*) an. regu-at+"n),
+nc-u.+ng ,"netary c"n#ergence an. the 'ur"pean M"netary ;n+"n, (1+) change) +n the p"-+c+e) "( centra- ban0) an.G"r
("re+gn g"#ern,ent), (1++) the +,pact "( ac/u+)+t+"n), +nc-u.+ng re-ate. +ntegrat+"n +))ue), (1+++) re"rgan+7at+"n ,ea)ure), an.
(1+#) genera- c",pet+t+#e (act"r), +n each ca)e "n a -"ca-, reg+"na-, nat+"na- an.G"r g-"ba- ba)+). Many "( the)e (act"r) ,ay be
,"re -+0e-y t" "ccur, "r ,"re pr"n"unce., a) a re)u-t "( terr"r+)t act+#+t+e) an. the+r c"n)e/uence). &he c",pany a))u,e) n"
"b-+gat+"n t" up.ate any ("r*ar.6-""0+ng )tate,ent. !" .uty t" up.ateE &he c",pany a))u,e) n" "b-+gat+"n t" up.ate any
+n("r,at+"n c"nta+ne. here+n.
2tep +$ Analyze your risks$
Jetermine
the natural catastrophe perils that could
impact your site$
Jetermine your degree of e6posure$
2uild or retrofit accordingly$
2tep -$ Prepare for the e'ent$
>rite your plan$
*ather additional information$
Train your team$
+a!e periodic inspections$
2tep >$ Post-e'ent measures$
>hen catastrophe
hits, the o'0ect is to restore
operations
as 3uic!ly as possi'le$ Jepending on the
e6posure and the impact on 'usiness, this can 'e
en"isioned
in a formal 'usiness continuity plan$
Allianz Risk Pulse 7 Focus: Natural Catastrophes page <