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Shareholders advocate disaster resistance before the NFIP exit



Disaster Experts urged companies and individuals to prepare for the upcoming hurricane and other potentially catastrophic events as a group of industry associations advocating an extension of the national flood program before the planned exit on Friday.

Tornados have destroyed the United States Midwest over the past week and the hurricane season officially starts Saturday, experts said at a briefing hosted by the American Property Casualty Insurance Association in Washington, DC, on Thursday.

"To put aside the cause is the reality we" ve had a period of more active weather, "said Barry Franklin, Head of Risk, Zurich North America in Schaumburg, Illinois." People have a false sense of security. I think the biggest thing we can do is raise awareness of the risk and reality of it because … if there are two big hurricanes or six big hurricanes or eight named storms, it just takes one. The second part is that when we continue to build on areas that were not previously exposed, events may have happened, but they did not hit anything. There was nothing in the way of the water. But we have built infrastructure now in places that were not exposed 50 years ago, so we should expect more influence from these big cats. "

Tornadoes are" more confusing than hurricanes, "said Debra Ballen, General Consultant and Chief Risk Officer, Business and Home Security Insurance in Tampa, Florida." The issue of hurricanes is that most of them stay in their season and despite what we Having said how quickly a tropical storm can intensify, there is a little more warning and we know that measures that can be taken should be taken to reduce the loss. "

Building and building up to the strongest possible building codes is a critical preventive measure," she said. "Building codes are an important part of what we do and it is important that they are constantly updated, as construction science is at stake." 1

9659002] Zurich North America has carried out several post-event reviews, including one exploring the impact of Hurricane Florence on North Carolina, "since severe weather does not go away and while the dangers are natural, our position is disasters not natural," Franklin says. "We make it a disaster if we are not prepared, if we build things in the weather. We know that prevention is a better risk management strategy than recovery alone."

For example, Florence, which was the third major hurricane to hit North Carolina, aged 19, resulted in catastrophic flood-related floods and floods. [19659002] "Florence highlighted the limitations of what I would only call hard engineering solutions," he said. "Just build something when it comes to a lake or a lake or a bridge – it may be good, but it needs other things to make it work efficiently. It also illustrated pretty good boundaries of the Saffir-Simpson hurricane wind scale … because It really is a one-dimensional metric, it speaks of wind speed and as it turns out, a long-term wet tropical storm can be just as devastating and do as much damage as a category 4 or 5 hurricane that makes landfall at 150 mph, so the water is very important. "

The National Oceanic and Atmospheric Administration predicted a 30% chance of an above-normal hurricane season, a 40% chance of an almost normal season and a 30% chance of a normal season 2019, two to four major hurricanes being defined. as category 3, 4 or 5 with winds of 111 mph or higher.

Water accounts for 90% of direct deaths caused by storm events, storm disturbances account for 49% of these deaths according to NOAA data presented by Michelle Hawkins, branch manager, National Weather Service in Silver Spring, Maryland. "Know your risk," she said.

More than 5 million policyholders rely on NFIP to insure their home or business against flood, the most common and most expensive natural disaster in the United States, according to a letter sent to Congress leaders on Thursday by APCIA, insurance agents and brokers, independent insurance agents and brokers of America Inc., the Mortgage Bankers Association, the National Association of Home Builders, the National Association of Mutual Insurance Companies and the National Association of Realtors.

"Developers of housing and commercial / apartment buildings will face challenges that receive funding for projects, not to mention the implications for construction workers who depend on these projects for their livelihood," the groups mentioned in the letter. "Insurance companies and agents must explain to their neighbors why they are unable to insure their homes and small businesses when the Atlantic hurricane season begins this weekend."

The US House of Representatives approved a bi-partisan stand-alone bill more than two weeks ago, it would extend NFIP until September 30, in addition to a similar extension included in the disaster's additional tax bill, which was also approved by the House. Meanwhile, the US Senate adopted a version of the Supplementary Grant Framework Program which also included a NFIP extension until September 30 and went on a two-week stand-alone extension to ensure that NFIP did not cease before the adoption of the Complementary Disaster Legislation, groups.

"Both congresses have made their position clear: NFIP should be extended," the letter said. "These were all broad bipartisans if not unanimous votes. We are extremely disappointed that some now protest against moving one of these standalone bills because of process issues when the whole congress has spoken clearly on the issue."

"It will are market disruptions, disturbances for the real markets, "says Tom Santos, vice president, politics, research and international, APCIA. "There is a risk of confusion from the insurance side of the house."

In October 2018, President Trump signed the 2018 Disaster Recovery Reform Law as part of the Federal Aviation Administration Authorization Act of 2018.

"Last year's DRRA passage will provide unprecedented sums of money states can use for preventive disasters so that the idea yes, lots of money goes in after the disaster, but with the money going in before the disaster we can reduce it in the long run, "Ballen said.

But NFIP is "deliberately subsidized to encourage people to buy it so it's not purely risk-based pricing so it's probably not so strongly a deterrent" and officials probably need to look into zoning and other measures to deter building additional features in cat-inclined areas, Franklin said. For example, commercial insurance companies can offer more discounts and additions to commercial companies and can carry out risk engineering studies and decide not to insure certain properties.

"On the commercial side, it is much more risk-based pricing because it is seen as an insurable danger to commercial companies because they have the ability to pay the premiums and the flexibility to place their business places where they choose," he says. more ability to stimulate and disinfect behavior in this way. "

                    


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