BUSINESSBC:
Superstorm reveals weakness of civic infrastructure.
Infrastructure is at risk worldwide. Insured losses are going up just specifically due to severe weather events.
SERGE CORBEIL IBC GOVERNMENT RELATIONS MANAGER
Severe weather events such as superstorm Sandy are creating a new, $ 1- billion baseline for annual severe weather payouts by Canada’s property insurers.
A spokesman for the Insurance Bureau of Canada said Tuesday that weather- related events such as “windstorms, hailstorms, severe rainfalls and sewer backups,” have already pushed this year’s payouts to about $ 750 million.
“And that was before Sandy made its way up into Canada. We don’t know quite yet what that will mean,” IBC government relations manager Serge Corbeil said in an interview in Vancouver.
The bureau lobbies all levels of government to take measures to adapt civic infrastructure — including roads, bridges, water and waste water systems — to cope with the effects of extreme weather events that are precipitated by climate change.
The storm hammering eastern North America has already caused an estimated $ 20 billion in property damage in the United States — including damage to the New York subway system and electrical utilities — and is expected to blow itself out by Wednesday in Eastern Canada.
“Infrastructure is at risk worldwide,” Corbeil said. “Insured losses are going up just specifically due to severe weather events. What that tells us is we need to look at how we prepare for that. How do we adapt to this changing world that we seem to be living in now.”
Corbeil said Canada has already had a record three consecutive years of payouts for extreme weather insurable losses that were near or above $ 1 billion, including $ 1.6 billion in 2011.
IBC noted in a recent report that water damage, including storms, has surpassed fire as the leading cause of claims in Canada.
“On average, Canada now experiences 20 more days of rain compared with the 1950s,” said the June 2012 report prepared for IBC by The Institute for Catastrophic Loss Reduction.
The report said British Columbia is home to the “greatest variability in weather found in Canada,” and can expect warmer and wetter weather — including a five- to 10- per- cent increase in precipitation — through to 2050 “with the largest increase occurring in coastal areas and the northern interior.”
B. C.’ s costliest disaster, the Okanagan Mountain wildfire in 2003, caused $ 210 million in damage claims.
Measures to avoid disaster don’t always have a big price tag attached, Corbeil said.
“Adapting the building code is not necessarily a cost, or it’s a very minor cost, to the price of a home,” he said.
“But there are other decisions we will have to make collectively; for example, do we still allow people to build in lowlying areas and, if we do, what can we do to protect those lowlying areas.
“We see it in New York and New Jersey right now and we’ve seen it here some years ago in Delta and those areas where you have those high, high tides and storm surges. Suddenly you have a lot of people facing very serious damage to their homes.”
Corbeil added that businesses are “typically” better prepared for the costs of disaster — although a survey released by BMO Bank of Montreal indicated that businesses need to devote more time to thinking about how they will cope with disaster.
The BMO survey said the vast majority of Canadian businesses have “no emergency or business continuity plans in place” to cope with the effects of an event such as extreme weather.
A minority had leadership succession plans, whereas 57 per cent of business operators reported having no plan if something happened to them, and 73 per cent had no plan if key senior managers were lost.
The number of unprepared businesses goes even higher when a natural disaster is considered.
“In case of an environmental emergency 85 per cent of businesses do not have a plan in place,” the survey found.
“Companies of all sizes are susceptible to having their operations affected because of severe weather, power outages, pandemics or other emergencies. It’s important for all businesses to have contingency plans in place in order to cope with these kinds of eventualities,” Steve Murphy, BMO commercial banking senior vice- president, said in a news release.
The bank offered a five- point plan to prepare for such an event. That includes development of a business impact analysis to prioritize critical functions; the impact of disaster risks such as fire, flood, power outages, even pandemics upon the business; development of a plan for gathering essential team members in the event of an emergency; communicating the plan to employees; and annual reviews to ensure the plan remains current and effective.