Aon Report: Global economy faced $123bn natural hazard impact in warmest year on record

CHICAGO, Jan. 13, 2016 /PRNewswire/ — Impact Forecasting, Aon Benfield’s catastrophe model development team, today launches its Annual Global Climate and Catastrophe Report, which evaluates the impact of the natural disaster events that took place worldwide during 2015. Aon Benfield is the global reinsurance intermediary and capital advisor of Aon plc (NYSE:AON).

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The report reveals that 300 separate global natural disasters occurred in 2015, compared to the 15-year average of 269 events, causing a combined total insured loss of USD35 billion – 31 percent below the 15-year average of USD51 billion, and the lowest annual insured loss total since 2009. The costliest event for insurers was a February winter storm that impacted much of the Eastern United States and resulted in public and private insurance payouts of more than USD2.1 billion.

Global economic losses from natural catastrophes in 2015 stood at USD123 billion – 30 percent below the 15-year average of USD175 billion. There were 14 multi-billion dollar economic loss events around the world, with the costliest being forest fires that burned out of control in Indonesia. At USD16.1 billion, The World Bank noted that the economic loss from the fires represented 1.9 percent of the country’s GDP.

Meanwhile, 2015 replaced 2014 as the warmest year since the recording of global land and ocean temperature began in 1880.

Stephen Mildenhall, Chairman of Aon Analytics, said: “Global insured property catastrophes in 2015 accounted for just 28 percent of economic losses, in-line with the 10-year average of 29 percent. In many regions, economic catastrophe losses are very material relative to national GDP and yet are insured at much lower levels than in the United States and Europe. Of our top five economic losses, four occurred outside the United States and yet none of these was a top 10 insured loss owing to low insurance penetration in the affected countries. With its abundant capital and sophisticated risk management tools, the industry should drive its own growth by better delivering on its core mission of providing critical risk transfer products to enable stable economic development in all regions of the world.”

The study reveals that the three costliest perils – flood, severe thunderstorm, and wildfire – accounted for 59 percent of all economic losses during the 12 months under review. The deadliest event of 2015 was the magnitude-7.8 earthquake and subsequent aftershock that struck Nepal in April and May, killing more than 9,100 people and costing the nation and surrounding countries an estimated USD8.0 billion in damage and reconstruction.

Steve Bowen, Associate Director and Meteorologist at Impact Forecasting, said: “While a notable uptick in recorded natural disaster events did not directly translate to greater financial losses in 2015, the year was marked by 31 individual billion-dollar disasters, or 20 percent more than the long-term average. For just the fourth time since 1980, there were more than 30 such events in a year. Asia once again incurred the greatest overall economic losses, representing 50 percent of the world total and four of the five costliest events. Despite 32 percent of global economic losses occurring in the United States, it accounted for 60 percent of the insured loss and seven of the top 10 costliest insured events. The strongest El Niño in decades had definitive impacts on global weather patterns during the second half of 2015 that led to costly flood, tropical cyclone and drought events. These impacts will linger into the first half of 2016, and ironically enough, we could be discussing impacts from La Niña at this time next year.”

By the end of 2015, the United States had extended its record to 10 consecutive years without a major hurricane landfall. While 32 percent of catastrophe losses occurred inside of the United States, the country accounted for 60 percent of global insured losses, highlighting the high level of insurance penetration.

The top 10 insured loss events in 2015 comprised of five United States severe thunderstorm outbreaks, one United States winter storm, one European windstorm, one Indonesian forest fire, and one United States drought. No region of the world sustained aggregate insured losses above its 15-year average in 2015; though EMEA, Asia Pacific and the Americas (non-US) were all above their respective medians.

For further information please contact the Aon Benfield PR team: Andrew Wragg (+44 207 522 8183 / 07595 217168) David Bogg or Alexandra Lewis

Give the Gift of Safety This Holiday Season – Don’t Drive Impaired

Give the Gift of Safety This Holiday Season – Don’t Drive Impaired

OAKVILLE, ON–(Marketwired – December 23, 2015) – MADD Canada and Allstate Insurance Company of Canada are asking Canadians to put safety at the top of their holiday wish lists by planning ahead for a sober ride home if they are going to be drinking.

“Every year, hundreds of Canadians are killed and tens of thousands are injured in impaired driving crashes which are completely preventable,” said MADD Canada National President Angeliki Souranis. “Please be safe and responsible this holiday season. If you’re going to be drinking, leave the driving to someone sober.”

Ms. Souranis knows the pain of losing a loved one to impaired driving. Her son Craig was killed in an impairment-related crash in 2008. As she prepares herself to face another Christmas without him, she wants all Canadians to know they have the power to prevent impaired driving crashes, deaths and injuries.

This holiday season, and all year long:

  • Never drive impaired; plan ahead if you’re going to be drinking — take a cab, take a bus, arrange a designated driver or plan to stay over;
  • Don’t accept a ride from a driver who may be impaired;
  • If you see a driver you suspect is impaired, call 911.

“We at Allstate Canada want to wish everyone a safe and happy holiday season,” said Allstate Insurance Company of Canada President and CEO John O’Donnell. “Canadians can give one another a very special gift this year by making a commitment to always drive sober. Let’s make sure the holidays are marked by celebration, not by the tragedy of an impaired driving crash.”

For anyone who needs a safe ride home from a holiday party, or for party hosts who need to arrange transportation for their guests, MADD Canada sponsor #TAXI and its new Taxi and Transit app, The Ride, offer fast and easy options. Dial #TAXI (#8294) on any cell phone to connect to the first available taxi company or a preferred one. Or download The Ride app on your smartphone to book nearby cabs and plan your best transit route anywhere in Canada. For more information, visit http://www.poundtaxi.com/ and http://gettherideapp.com/.

MADD Canada is currently in the midst of its 28th annual Project Red Ribbon campaign to promote safe and sober driving during the holiday season, with Allstate Canada as the Title Sponsor. For more information, please visit: http://madd.ca/pages/programs/awareness-campaigns/project-red-ribbon/. Anyone who wishes to support Project Red Ribbon with a donation can do so online through the web site, by calling 1-800-665-6233 or by texting “madd” to 45678 (a $5 one-time donation is added to the donor’s cell phone bill and payable to his or her service provider.)

About MADD Canada
MADD Canada (Mothers Against Drunk Driving) is a national, charitable organization that is committed to stopping impaired driving and supporting the victims of this violent crime. With volunteer-driven groups in more than 100 communities across Canada, MADD Canada aims to offer support services to victims, heighten awareness of the dangers of impaired driving and save lives and prevent injuries on our roads. To learn more, visit www.madd.ca.

About Allstate Insurance Company of Canada
Allstate Insurance Company of Canada is one of the country’s leading producers and distributors of home and auto insurance products, serving Canadians since 1953. The company strives to keep its customers in “Good Hands®” as well as its employees, and has been listed four years in a row on the Best Employers in Canada list. Allstate Canada is committed to making a positive difference in the communities in which it operates and has partnered with organizations such as Mothers Against Drunk Driving (MADD Canada), United Way and Junior Achievement. To learn more about Allstate Canada, visit www.allstate.ca.

Contact:
For more information, contact:
Angeliki Souranis
MADD Canada National President
514-515-6233
asouranis@madd.caKevin Wilson
Senior Communications Specialist
Allstate Insurance Company of Canada
905-475-4536
kwilson@allstate.ca

Report: Little to no fire protection in almost half of First Nations reserves

By Chinta Puxley

THE CANADIAN PRESS

An internal federal government report says almost half the First Nations across Canada have “little to no fire protection” and rely too heavily on poorly trained volunteer firefighters who can’t do the job.

The 2011 report examining insurance coverage for First Nations communities, obtained by The Canadian Press through Access to Information legislation, found only 56 per cent of First Nation sites across Canada have adequate fire protection – most because they depend on a neighbouring municipality.

British Columbia and Manitoba had the highest percentage of First Nation sites with little to no fire protection while First Nations in Atlantic Canada had the most sites with adequate service.

“The number of fire-related deaths in First Nations is also a major concern,” the consultant’s report said. “The fire death rates in First Nations are substantially higher than those off reserve.”

The report found that fire incidence rates for First Nations are 2.4 times higher than for the rest of Canada. First Nations residents are also 10 times more likely to die in a house fire.

The victims are often young children.

A two-year-old boy and an 18-month-old girl were carried by their father from a burning home this year on the Makwa Sahgaiehcan reserve in Saskatchewan. They were pronounced dead at the scene. The fire department from a neighbouring municipality didn’t respond due to a funding dispute with the First Nation.

Two-month-old Errabella Harper died in a house fire on the St. Theresa Point First Nation in 2011. At the time, the community’s fire truck was broken, with no fire hoses and no one knew where the keys were.

A second fire about two months later on the God’s Lake Narrows First Nation killed Demus James and his two grandchildren. Neighbours tried unsuccessfully to douse the flames with buckets, wet towels and a low-pressure hose. An inquest into the deaths found the reserves were woefully unprepared.

Reserves rely too much on volunteers who aren’t properly trained to protect homes that are dilapidated and not built to code, the government report found. There is a high attrition rate and volunteers don’t “adequately serve the public interest,” it added.

As the Liberal indigenous affairs critic, Carolyn Bennett called federal funding for fire protection services “appalling.” Now indigenous affairs minister, Bennett said the report’s findings are “not acceptable.”

First Nations need better fire prevention tools and adequate housing, as well as the ability to fight fires when they break out, she said.

“We think there are far too many First Nations families living in homes that other Canadians wouldn’t be subject to,” Bennett said in an interview. “This is a goal for all of us and for all Canadians – they don’t think that First Nations people should be living in third-world conditions.”

Grand Chief Sheila North Wilson, with Manitoba Keewatinowi Okimakanak, which represents northern First Nations, said the lack of fire protection provided to First Nations would never be tolerated in any other Canadian community.

“It’s appalling,” North Wilson said. “Are we second, third-class citizens?”

First Nations have very little discretionary spending and fire protection has to go up against housing, education, water and sewer systems, she said. Deliberately under-funding basic priorities like fire protection is “racist,” she said.

A spokesperson for the Department of Indigenous and Northern Affairs Canada said the government takes issue with parts of its report. The report “does not provide a complete picture of fire protection coverage in First Nation communities today,” said Michelle Perron, in an emailed statement.

A reserve can have more than one site, some of which may not have housing or infrastructure and “therefore no fire protection service,” she said.

On Wasagamack First Nation, a remote northern Manitoba reserve, last week, a brand-new youth centre which hadn’t even opened yet burned to the ground.

Chief Sharon Mason said the volunteer fire department was only able to keep the fire from destroying the adjacent community hall.

It was the best the department could do with an ancient fire truck that still bears the name of a town in the United States.

“We need a proper fire hall. We need a truck that actually works. We need supplies for our volunteers,” she said, adding the reserve can’t afford to lose any homes because it is already struggling with a chronic housing shortage.

“Fire safety is really critical.”

canada-press

Tips to cut down on risk for Canadian exporters

From political to financial upheaval, Canadian companies doing business abroad have found reason to be cautious about the uncertainties they can face. But with slowing growth in this part of the world, some companies are turning to the global market, along with its attendant risks.

Urs Uhlmann, chief executive officer of Global Corporate, Zurich Canada, is responsible for the Swiss insurance company’s large-risk business in Canada. Zurich has operations in more than 170 countries worldwide. As a member of the global insurer’s management team, Mr. Uhlmann assists Canadian insurance brokers, risk managers and chief financial officers in understanding how to protect clients from risks associated with doing commerce internationally. “Zurich’s global network gives our customers access to on-the-ground insights into the local markets where they want to do business,” Mr. Uhlmann says. Here he shares his top five tips for how Canadian exporters can avoid the pitfalls of working abroad:

Do your research on the buyer. Doing business in emerging markets usually means you will face less transparency when it comes to evaluating your buyer. It is imperative that you get reliable financial information through reviewing audited financial statements and credit reports where possible, as well as information on your buyer’s relevant experience, management practices, reputation, political affiliations and size or position in their local or regional sector or economy. Operating cash flow, profitability and debt or leverage obligations are examples of financial metrics that may provide initial comfort but it is equally as important to evaluate your buyer’s past payment performance and whether it has had any disputes with local governing bodies that could expose you to unforeseen risks in the future.

2) Understand the political climate.

Faced with increasing pressure to grow revenue and market share, exporters are turning to emerging markets to find new opportunities. With these new opportunities come a unique set of risks posed by operating in an environment of weak governing institutions, poor regulations and underdeveloped legal systems. It is crucial for exporters to understand how these risks can affect them and to develop a strategy to protect their balance sheets against catastrophic losses. The outbreak of political violence in the Middle East and Ukraine are examples of how unpredictable political risk events can be and how quickly a stable country or region can descend into chaos.

3) Consult with experts.

If you are new to a country or region, consult with a credit and political risk broker to help you identify the risks and to develop an appropriate business plan to protect your company against losses.

Export credit agencies (ECAs) are government agencies that are dedicated to facilitating and expanding domestic exports by providing financing, political risk and trade credit insurance and consultation services to businesses looking to expand into new and challenging markets. Export Development Canada is Canada’s ECA and can provide consultation in developing an export strategy, identifying new export opportunities, addressing global trade regulation and managing foreign-exchange risk.

In addition to ECAs, there is a robust private-sector credit and political risk insurance market here in Canada. There are benefits to working with an ECA and the private insurance market. An exporter should be aware of what both can offer and decide which can best meet its needs.

4) Make sure you get paid – through a letter of credit.

A letter of credit (LC) is an instrument issued by a bank to guarantee payments to a seller on behalf of a buyer for a specific trade transaction. The LC is used to facilitate a trade between a buyer and seller where the seller needs additional security to agree to the sale. By having the bank issue an LC on behalf of the buyer, the seller effectively transfers the non-payment risk from the buyer to the issuing bank.

5) Make sure you get paid – by insuring your receivables.

A trade credit insurance policy is a risk mitigation tool offered by the private insurance market or an ECA that covers the exporter’s accounts receivable against a non-payment due to an insolvency, protracted default or political risks.

Canada to invest $50 million in G7 climate risk insurance initiative in developing countries

OTTAWA, /CNW/ – On Dec 5, The Honourable Catherine McKenna, Minister of Environment and Climate Change, announcedCanada’s contribution of Can$50 million to the G7 Initiative on Climate Risk Insurance to help people in developing countries protect themselves against the economic consequences of more intense and increasingly frequent natural catastrophes like severe flooding, droughts or heavy storms.

Insurance helps poor and vulnerable countries build resilience to the impacts of climate change by covering a portion of the risks that arise from natural hazards and extreme weather events. Together with the G7 and our partner countries, Canada is working to provide up to an additional 400 million poor people with insurance against the risks of climate change by 2020.

Canada is a leading contributor in supporting climate risk insurance in developing countries, notably through its participation in the Caribbean Catastrophe Risk Insurance Facility. Since its inception in 2007, the Facility has made 13 payouts for hurricanes, earthquakes and excess rainfall totalling approximately US$38 million to eight member governments.

Canada’s contribution to the G7 Initiative on Climate Risk Insurance will help to stimulate greater coverage of effective climate risk insurance markets in countries that are the most vulnerable to natural disaster. In doing so, we will work closely with all stakeholders by funding insurance policies.

Today’s announcement is part of Canada’s pledge of Can$2.65 billion over the next five years to support developing countries’ transition to low carbon economies that are both greener and more climate resilient. This is the most significant Canadian climate finance contribution ever.

Quotes

“The risks and costs of climate change on developing countries are very significant and Canada is proud to do its part in providing greater access to insurance.”
– The Honourable Catherine McKenna, Minister of Environment and Climate Change

“Developing countries are the most affected by climate change. Canada is committed to supporting the poorest and most vulnerable countries to adapt to the adverse effects of climate change, including by using innovative mechanisms like climate risk insurance.”
– The Honourable Marie-Claude Bibeau, Minister of International Development and La Francophonie

Quick Facts

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  • Climate risk insurance is a means of obtaining insurance against the risks of extreme weather events such as severe flooding, droughts or heavy storms. It can play an important role in providing security against the loss of assets, livelihoods, and lives, and the G7 Initiative on Climate Risk Insurance aims to increase the number of people covered by this kind of insurance by 400 million by 2020.
  • Canada was the largest contributor to the establishment of the Caribbean Catastrophe Risk Insurance Facility, providing $25 millionfrom 2007-2012.
  • Canada will also contribute $10 million to the World Meteorological Organization to support better early warning systems in the most vulnerable communities under the Climate Risk and Early Warning Systems (CREWS) initiative. This funding contributes to the overall goal of assisting developing nations to become more climate-resilient.

Prime Minister announces investment in Global Climate Change Action

SOURCE Environment and Climate Change Canada

For further information: Caitlin Workman, Press Secretary, Office of the Minister of Environment and Climate Change, 819-938-9436; Media Relations, Environment and Climate Change Canada, 819-934-8008

RELATED LINKS
http://www.ec.gc.ca

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