Walter R. Stahel The Geneva Assocation, Genf WMO Meteorological Day 23.03.2010

1. Extreme-weather-wisedecision taking Walter R. Stahel The Geneva Assocation, Genf WMO Meteorological Day 23.03.2010

2. Major risks of the past – pure risks Are the four horsemen of the apocalypse still relevant? famine, death, war, pestilence Risks are always defined in relation to people at risk

3. What is Risko Management (RM)? • RM is a balancing ofchances and risks • RM can be applied to any issue • The objective of RM is to increase redundancy and resilience, and to reduce vulnerability (of society), to prevent losses

4. Increasing world population - chance or risk?world population since 10,000 BC (billion) More people will be forced to live in weather sensitive regions The world population doubled since 1960 and the per capita resource useincreases world-wide

5. Changing lifestyles - chance or risk? Opening celebrations of the Winter Olympics in St Moritz 1948Do you remember Vancouver 2010? Do you spot the difference?

6. ‘Titanic syndrome’ – the human belief in technology can be a new risk Captain Smith believed the engineers that the Titanic was unsinkable, that precaution was not longer necessary! • Technology enables us today to build in locations where our fathers would maybe have organised a picnic: a nice view is more important than precaution! • extreme weather events are a spectacle to watch from close by! • Underground spaces are used for bank safes, computer centres, public works, infrastructures, thanks to advances in technology.

7. How do we measure losses? • Economic losses? • Insured losses? • casualties(dead, handicapped)? • Haiti (quake) 2010; 250,000 death; 8-14 Mrd $ • Myanmar (storm Nargis) 2008; 138,366 d; 4,1 Mrd • Indonesien (Tsunami) 2004; 226,000 d; 5,2 Mrd $ • Venezuela (flood) 1999; 30,005 d; 3,0 Mrd $ • Guatemala (quake) 1976; 23,000 d; 3,7 Mrd $ • Nicaragua (quake) 1972; 10,000 d; 4,3 Mrd $

8. What were the biggest losses? 9/11 Impacts of toxins in air, water and soilwill be more expensive and deadly than climate change,according to many scientists Katrina et al storm Lothar hurricane Andrew Northridge earthquake

9. 2008 has changed the world The global banks’ write-downs2007-09 (uninsured) were 17 times the 2005 insured losses from Katrina et al.Note:all uninsured risks are absorbed by Nation Statesas insurers of last resort.

10. RM: coping with hazards throughmitigation, adaptation, disaster recovery PRE-CAT • Mitigation is a risk-focused precaution: such asreduction of GHG emissions against climate change. • Adaptation is object-focused : dams against floods also protect against flash floods and storm surge, tsunamis; earthquake-proof construction against windstorms. POST-CAT • Loss minimisation and disaster recovery are action-focused: supplyingdrinking water and food, heavy equipment, disciplined trained staff in civil protection or army to recover from floods, quakes, avalanches – if intact.

11. What is insurance ? Underwriting: • pooling similar risks, • transferring risks to make losses supportable for victims, • compensating the financial impact of losses, • calculating risk-based premiums (rewarding loss prevention attitudes, e.g. fire sprinklers), • enabler of technological progres. Asset management: • investing in long-term ‚safe‘ assets. Risk consulting: • risk engineering, loss prevention.

12. What can insurance do re. weather risks • helping counter climate risks through active cooperation in implementing building codes or similar means which encourage the use of sustainable practices, • working closely with policymakers on communicating to our customers their climate risk levels, possible strategies of mitigation and adaptation, • providing innovative solutions for climate risk issues, including tools to assess and counter climate risks, • urging policymakers to collect robust data and make it freely available to allow risk assessment and facilitate efficient solutions where premiums are risk based, • and promoting mitigation and adaptation:

13. developing new products to recover from extreme weather risks • ART Alternative Risk Transfer, • CAT pools (Caribbean Catastrophe Risk Insurance Facility), • Weather derivatives, • Microinsurance, • Index-based microinsurance, • Grants for index-linked agricultural insurance, can be offered by financial institutions, World Bank, insurance companies

14. Mitigation: promote proper maintenance of infrastructure – water, rainwater runoff, roads Caption Minneapolis, USA, Mississippi bridge

15. Mitigation: promote BAT, e.g. in IT and A/C Of the energy going into a modern server farm: • 4% actually process data, • 16% is used to keep the servers idling, • 40% is used to cool the interior of the machines, • 40% us needed to cool the rooms where the servers are located. 80% of electricity could be saved by: • water-cooled servers, using the hot water for heating and hot water purposes. pm Bermuda: 60% of electricity consumption is for A/C ! Quelle: IBM research

16. Mitigation, adaptation, recovery • Climate Change is a global science, but its impacts, such as extreme weather events, are local or regional. • Those who contributed the least will be hit the most (the poors of the emerging economies). • We can act by:- buildingclimate-resilient communities, - developing and using appropriate technologies,- dematerialising the economy (low-carbon),- improving the supply of safe food, drinking water, sanitation and health services.

17. The limits of insurability Insurance has to work within the limits of insurability, which means: • insuring sudden and accidental losses, but not gradual changes, e.g. sea level rise is excluded, • insuring occasional risks, but not annually recurring events, e.g. regular flooding , • knowing the Maximum Potential Loss (MPL) of the events covered, e.g. the highest sea level, • pure risks but not entrepreneurial risks.

18. Thank you for listening www.genevaassociation.org