What’s the Bill for Repairs after Recent Natural Australasian Disasters?

The Global Catastrophe Recap for April 2013 from reinsurance company Aon Benfield gives a region by region breakdown of recent damages and costs after different natural disasters. The Impact Forecasting organisation, part of Aon Benfield, uses data on disasters to build models of catastrophes to better understand the risks. This helps customers better understand the risks too, and creates an opportunity to improve business continuity. In April 2013, the sole natural disaster referenced in Oceania (Australia, New Zealand and the South Pacific Islands) was the flooding in New Zealand. Three months earlier however, flooding in Australia had caused 100 times the level of damage of the April floods in New Zealand.

The reports published by Impact Forecasting (like this global recap report for April 2013) give details on the events, their location and the estimated economic loss incurred. Thus the flash flooding in northern parts of New Zealand on the 20th and 21st of April is estimated to have caused over 30 million dollars (New Zealand dollars) of loss overall, or the equivalent of 25 million in US dollars. By comparison, the flooding in Queensland and New South Wales in Australia between the 21st and the 30th of January, which also claimed six lives, was estimated to have caused economic loss equivalent to over 2.5 billion US dollars. The effect on business continuity is not specified.

While the natural disasters in the recap report are typically related to severe weather conditions on earth, extreme space weather is also a factor that is researched by Aon Benfield. Events such as solar flares and geomagnetic storms can potentially cause breakdowns of electricity supplies, satellite navigation and telecoms networks on earth. They are part of the low probability high consequence phenomena that can disrupt supply chains. Despite the fact that these events are predictable (unlike the “black swan” events we’ve discussed elsewhere in this blog), the company finds that many organisations do not pay sufficient attention to the risks involved.