The benefit of resilience building

1. The benefit of resilience building 21 December 2016 David Nash Z Zurich Foundation

2. Agenda • Why we chose to work with community flood resilience • How our program works • What we have achieved so far • Motivation - why should an insurer (in fact any business) care about resilience building • Q&A

3. Why choose Community Flood Resilience • Why Floods: • The humanitarian and physical losses from flood, in any year, are more than the losses from all other natural hazards combined • Floods are a global issue affecting almost every country • Why Communities: • Every community is different and experiences flood differently, so solutions will necessarily be different for each one • Why Resilience • As an insurer we believe that pre-event action to build resilience to a hazard is more effective than post-event • Yet 87% of all disaster-related funding is targeted at relief and recovery after an event • Zurich’s risk understanding expertise can be used to shift this equation

4. Theory of Change • Our aim is that communities become more resilient in the face of floods. • Resilience is defined as the ability of a community to pursue its social, ecological and economic development and growth objectives, while managing its flood risk over time, in a mutually reinforcing way. • This means that a greater proportion of disaster-related funding from all sources is directed to pre-event resilience building • This requires that stakeholders have the capacity: • To know how to engage in resilience building with communities AND • To be willing to redirect or prioritise resources towards this • To do that, they will need good knowledge about the benefits of taking action and practical evidence of what works • Our community program • Tests resilience building activities and develops knowledge on what works AND • Invests in research, specifically to support development of solutions and to understand the benefits

5. A cross-sector Alliance Knowledge for action • Research and modeling • Influence • Scientific credibility Case studies Methodologies & tools Catalyze • Risk engineering • Financial resources • Influence and advocacy Global Reach Technical Innovation • Small and agile • Innovation and ideas piloting • Solutions catalogue • Community presence • Scale and reach • Influence and advocacy Innovation & Technical Advice

6. What are achievements so far? • At the Community level: • Bangladesh, Indonesia, Mexico, Nepal and Peru: Among the most flood exposed countries in the world. We can transfer insights from these communities, both to the developed and the developing world • In Indonesia: Early Warning System with real-time flood warning implemented. Information access through website and SMS. Link to government authorities. Fully endorsed by the government disaster management agency. It benefits 17 million people. • Assessing and measuring flood risk is key to identify the right solutions. Currently no validated approach to measure what makes a community resilient. We created our own Flood Resilience Measurement Tool now being tested in 8 different countries including the US.

7. What are achievements so far? • At a Research level: • IIASA and Wharton provide new insights into flood risk management and test hypothesis that risk reduction is better than relief and recovery. • Review of cost-benefit studies: every dollar spent on risk reduction measures saves 5 dollars through avoided and reduced losses. • Insights why people do not protect themselves from flood risk even if protection measures are available: People have a false sense of security. They may overestimate the likelihood of a flood, but underestimate the losses. • Zurich-developed forensic post-event review methodology (PERC) that analyzes large flood events. 9 major floods reviewed. Findings are cross-cutting, irrespective of their geographical or development context. • We use the insights gathered through research and PERC to improve services to our customers and our in-house expertise in RE and UWR through trainings, workshops and communication.

8. What are some achievements so far? • At a Public Policy Level: • We support national, regional and global public policy discussions on flood risk and resilience. We want to improve national flood insurance arrangements longer term. • In 2016, co-organized a Forum on the Financial Management of Flood Risks with OECD. The forum gathered over 100 regulators, insurers and academics, and positioned Zurich as the go-to insurer for insights on flood risk and resilience. • In 2015, North America CEO participated in a White House meeting on climate resilience and extreme weather events. He presented our approach to measuring resilience which led to further meetings regarding the role the insurance sector can play. • We are engaging with the European Commission (EC) Working Group on Climate Action (DG CLIMA), with the EC Working Group on Floods and the Rhine Commission • At a Country Level: • Flood resilience is a focus topic for Zurich Switzerland. In 2015, they launched a Natural Hazards Radar which is a publicly available tool for a property flood hazard and risk assessment in Switzerland including a set of recommendations how to manage risks.

9. Collaboration Success • Development of a framework to understand what provides resilience to floods at a community level • Based around the idea that the way in which a community builds, uses and maintains its assets (the 5 capitals of the sustainable livelihoods framework) creates aspects of resilience • Creation of a measurement tool to measure changes in these capitals over time • Testing across communities in 8 countries to provide evidence that building capitals results in better resilience outcomes • Providing analysis of community data to help with solution finding

10. What motivates Zurich’s involvement? • Challenge for any business is relevance to community • Insurance is a risk-transfer tool, but only effective at the tail end • In many places, insurance is simply not a priority spend • By building resilience, communities manage risk and build prosperity • This creates relevance for insurance and opens new markets

11. Thank you zurich.com