Hurricane Katrina 10 years on - Lessons and implications for Australian business

Hurricane Katrina 10 years on - Lessons and implications for Australian business

10 September 2015

Lessons and implications for Australian business

Allianz report looks at the lessons learnt from Hurricane Katrina ten years after it devastated New Orleans.

Asian cities integral to the supply chain for many Australian businesses are vulnerable to similar cyclonic events.

Construction sites and maritime risks are highly susceptible to increased windstorm severity.

A decade after the devastating Hurricane Katrina hit the US, Allianz Global Corporate & Specialty (AGCS) has undertaken a detailed analysis of storm-related losses, trends and global preparedness of businesses for such future events.

While the US Gulf Coast is better prepared to withstand the effects of a hurricane due to better education, improved construction guidelines and increased third party inspections, the real and growing risk is outside of the US.

Holger Schaefer, CEO of AGCS Pacific, points out that “50% of the world’s top ten cities in terms of assets exposed to windstorm are in industrial parks in Asia and this is predicted to increase to 80% by 2070. These cities form an integral part of the global supply chain, particularly for businesses based in the Pacific region, and thus requires careful assessment of the windstorm supply chain risks for such companies.”

The Pacific Regional Manager at Allianz Risk Consulting, Iain Ritchie, says “not only is pre and post loss risk management crucial in mitigating the impact of increasing windstorm losses, risk management should also focus on loss minimisation during windstorm events.

Business continuity planning must also incorporate direct as well as indirect supply chain exposures to be effective.”
Iain goes on to point out that “the general consensus of scientists is for an increased severity rather than frequency of windstorm events, such as Australia has experienced this year. Further, with the current growing El Nino in the Pacific, climatologists are predicting even more intense weather phenomena in the immediate future, which requires risk assessment and planning.”

The AGCS report concludes that construction sites and maritime risks are some of the most highly susceptible to any increase in the severity of windstorms, which already account for an estimated 60% of maritime losses.

The report contains some useful tips for pre, during and post loss windstorm planning and is recommended reading for any businesses involved in the global supply chain or insurance brokers advising clients about supply chain and business interruption risk management.

The report can be downloaded from the AGCS website at www.agcs.allianz.com

About Allianz Australia
General Insurance Company of the Year 2014, 2013, 2012, 2011, 2009*
Best General Insurance Company of the Year 2014, 2012, 2010, 2007, 2006**
Women’s Council Employer of the Year Award 2013*

Allianz Australia delivers a wide range of personal, commercial and corporate insurance products and services to more than 2.5 million policyholders. Over 50% of Australia's top 200 BRW-listed companies have some form of insurance cover with the group and the group provides workers compensation services to around one-fifth of Australian employees.

*Australia & New Zealand Insurance Industry Awards
**Australian Banking and Finance Insurance Awards