So, alright everyone, thanks for coming out to learn how to deploy and manage Ruby on Rails applications on Amazon Web Services. So a quick introduction to who we are. So all three of us work on the AWS SDKs and tools team. I'm Alex Wood, you can find me on Twitter and GitHub. And in the back handing out codes, we have Trevor Rowe and Lauren Segal who you can also find on Twitter and GitHub. And if you have any questions during the lab, feel free to raise your hand and Trevor and Lauren will come down and help you out. And during the parts where we're just working on exercises, you can ask questions of me up here as well. So what are we doing today? We have a Ruby on Rails sample application that's linked inside the instruction document. You don't need to bring it down or clone it or anything. But it's there so you can look around, see how we did the integrations, play around with it further after the lab is done. We are going to deploy that to Amazon Web Services using AWS OpsWorks. After that, we're going to use Amazon Simple Email Service to send action mailer messages using the new AWS SDK Rails gem. And we may run over time for the last part, but all the instructions are there. We're going to show you how to cache the Rails asset pipeline using Amazon CloudFront. So here's a slide that was up while everyone was coming in. So just a quick show of hands again, if you do not have an AWS account yet, could you raise your hand? Cool, so for this lab, you will need an AWS account. And with the credit handouts that we're giving out, you can create an account straight from there. Could you raise your hand if you don't have AWS credits yet? So Trevor Lauren will be buying a second with a credit for you. So we'll take a couple of minutes here just to make sure everything is set up, so log in to your AWS account or make it if you don't have one yet. Apply your credits, which you shouldn't need for the lab, but it's 50 bucks, I'd encourage everyone to take it and experiment afterwards, try things out. And there's also a tiny URL link to the instructions page for the lab. So if anyone can't get to that page, let me know as well. And we'll take about one more minute for this. And while we have these pauses, feel free to shoot a question to me if you have one at any time. Yeah, so just a double check, is there anyone who does not have their AWS credits in their hand and applied yet? Raise your hand so Trevor Lauren can find you. Yeah, I mean, if you have an account, you can still apply the credits to it. The lab is, we're using the smallest instance types and we're cleaning everything up afterwards. So, and if you're in the AWS free tier, that should cover some of the cost as well. But definitely take a credit anyway and keep playing around. We'll talk a little bit about what you can do at the end of the lab as well. And we'll be hanging around afterwards if anyone wants to ask more questions or try more stuff out. All right, so let's talk about what we're building. So we're building a two layer web application with AWS Opsworks. So we're going to start by creating an Opsworks stack, which you can think of as a container for all of the other resources that our application deployment is going to have. We're going to have two layers, as mentioned before. A Rails app server layer which will contain any instances that are running Ruby on Rails. And separate from that in the connection configured by Opsworks, a MySQL layer that is going to be running a single EC2 instance with MySQL on it. We're also going to be from the app layer, sending out emails to user accounts with Amazon SES and the AWS SDK Rails gem. And we're going to cache the Rails asset pipeline using Amazon Cloud front. So why Opsworks? This is a question I've heard a few times while we've been talking about the lab earlier in the conference. I wanted to kind of strike a midpoint on the convenience and control scale. So Opsworks gives you a lot of fine-grain control over how your instances are configured, how you scale them, and where they live. Which we have other options such as now AWS code deploy, CloudFormation, or manually using instances that give you more fine-grain control or choices like Amazon EC2 container service and Elastic Beanstalk, which give you more convenience. So we're definitely happy to talk about any of the other options afterwards, but this is a nice middle ground, I think, for the lab that we're doing today. So I think we already talked a lot about these, but just a review of some of the key concepts we're going to talk about. So AWS Opsworks uses Chef to help manage and configure your AWS instances. So we talked about the concepts of a stack and layer. There's also a concept of an app, which contains all the configuration needed to deploy your application to your instances. We're also using the new AWS SDK Rails Ruby gem. So out of curiosity, we released this a few weeks ago. Can you raise your hand if you've tried that gem out before? Awesome, so a few of you have seen that. And that builds on top of the AWS SDK for Ruby V2 that we released last year. We're also going to be covering a little bit about AWS identity and access management, talking about how we can manage our credentials safely. And best follow the principle of least privilege. Including IAM roles for Amazon EC2, which the AWS SDK Rails gem can use. And we're also going to review Amazon SCS and CloudFront. So we have a Rails application. What do we do so that we can actually deploy it to AWS Opsworks? Right here is the diff. Can everyone see it? It might be. Yeah, so I'll just review what it is. It's a change to the gem file where we say in production, we use the unicorn gem in the MySQL 2 database adapter gem. And we create a file called before sim link in a deploy folder in our Rails application, which essentially pre-compiles our static assets during the deployment phase. So before sim link is a chef hook. Who here is familiar with chef hooks? Cool. So this is already provided for you in the repo we're deploying. So we don't have to make these changes. This is just a review of the changes you would have to make to take a Rails application you have and get it so it will deploy and run on AWS via Opsworks. So now we're gonna get into the first exercise. We're going to take our sample application and deploy it to AWS with Opsworks. So to start, we're gonna create a stack. We're going to create the application in database layers. And then we're going to create and deploy an application. So the first exercise and the instruction sheet does have a link so you can jump around the different exercises. Is to create an Opsworks stack.  And if you have any questions, feel free to let me know at any time. Yeah, so it's just tinyurl.com slash Rails comp 2015-AWS. And if you're watching this on video, I'm going to keep that link up after the conference. And if the link is not up for any reason, feel free to get a hold of us so I can remediate that. Does everyone have that now? So raise your hand if you don't have the instruction sheet open. Give you guys a minute. Are we good to go on the instruction page? Raise your hand if you don't have it. One thing I want to call out while you're making your stacks as well, is to check your VPC option. So if you do not have a default VPC, so if I look at these VPCs, I have a default VPC and one that I created earlier. I would choose the default VPC cuz that'll work right out of the box. And if you do not have a default VPC option available, please raise your hand so Trevor and Lauren could help you out. If you don't have a default VPC, what region are you in? So the question was what is a VPC? And so VPC stands for virtual private cloud. So your instances inside a VPC, you can have control over what kind of inbound and outbound traffic is allowed, for example, and set up different subnets. So it's sort of a way to handle networking for your instances. So for example, as you were to expand on this app, you might say that your app and database instances should not be accessible from the public internet that they can only be accessed through a load balancer instance or SSH traffic through a bastion server. And if you have a VPC, it makes it easy to set that up. So for the purposes of this lab, we're just deploying in it and they're gonna be fairly permissive. The instances will be publicly accessible. But we'll have a little bit of a discussion at the end is how you could further productionize the application as you iterate on it. So in additionally, while you're creating this stack, you'll notice the instruction sheet. It has a instruction first to make an SSH key. Strictly speaking, you don't have to do this, but it's definitely recommended in case something goes wrong. We'll be able to SSH under the instances and see the logs. And if you have an existing SSH key, you can import it or just use that when you're creating the stack. So frequently asked question has been what should I name my key pair? You can name it anything you'd like. I named mine RailsConf. The trick is you wanna make sure that you know the key you're using is on your machine and then when you add that to the stack, it means you'll be able to SSH to your instances. So for the purposes of the lab, we're using a database layer that OpsWorks provides for you. In the Appendix section of the instructions, I've shown how you can use Amazon RDS for either Postgres, Microsoft SQL Server, Oracle, or even MySQL instances with RDS and failover. So there are further instructions about how you could do that and you could follow along with that after the lab. And then in other cases, so what OpsWorks will do is it will wire up your connection to your database. So if you wanted to use a different type of database instance, you could configure that in your Rails application and Rails would just connect to that. This is a show of hands, who has their stack created? So we'll leave a few more minutes for that. No, you don't have to create the whole thing. Just having created the stack and then the next exercise is going to be to create the layers. Yeah, so sorry, just to make, yeah. Raise your hand if you have not made the, if you have not gone through the add stack form yet. If you haven't made the layers yet, that's okay. That's the next exercise. And then raise your hand if you need help getting that set up. So while they're working, do you have a question I can help with? So the question was if creating a key is necessary. Again, you don't need to create an SSH key, but if something goes wrong later with your application and you don't have an SSH key, we don't have a way to look at your logs. So I would highly recommend it. And then if you have created your stack and you'd like to move on to the next exercises, feel free. I think this first exercise probably takes the longest with all the initial setup we have going on. So for the add stack form, most of the fields are going to use the defaults. But if you look in the exercise instruction, I list out a few that you'll want to change. One that is important is you want to create new IAM instances, or new IAM roles, because we're going to edit them. And if you don't create a new role, your change could be. If you had multiple stacks, you would be changing the permissions on all of them at once. So it's a best practice to create a new role anytime you're creating a new stack. So the question was, if we need to create an elastic load balancer. So we're not creating an elastic load balancer during this lab. I'm gonna go back to the, so in this lab, simply for time purposes, we're going to directly connect to your application server. It is a best practice to have a load balancer. But for the sake of time, we're simplifying the architecture. And we'll talk a bit at the end about how you would design things as you iterate on this design. So the next step is Exercise 1B on the instruction sheet, which is we're going to create the opsworks layers and launch an instance in each of them. And again, where we're using non-default options, that should be in your instruction sheet. And I also added for many of these a screenshot that you can compare against. Sure, so the question was, what would be the difference of choosing an instance store versus an EBS back store? For the sake of this lab, there is no difference. The difference you would find if, for example, you're running your database on instance storage, if that instance goes down, you lose your database and everything on it, unless you have snapshots and backups that you're creating. If it's an EBS backed instance, if the instance were to go down, you would still have the EBS instance with your hard drive on it, that you could attach to a new instance that you create to replace your failed instance. Does that answer your question? So the question is, when would you choose instance store? And the recommended default in opsworks is to choose an EBS backed instance. But for example, if you feel that the storage on your instance is enough, say for your application server, and you don't care about anything on it because it's stateless, you could choose an instance store. And if the server goes down, it doesn't matter. And another thing to remember is we're creating MySQL opsworks layers, we're not creating RDS layers. This is simply a matter of the fact that using an RDS instance takes a little bit more time. And for the sake of the lab, we're going with the quicker time option. But we do have instructions in the instruction sheet or a link to a blog post that will show you how you could switch this over to use RDS. Now I'd also recommend that you keep an eye on the instance size that you can select. As you can see here, the default is a C3 large, which is going to be a little bit more expensive than a T2 or T1 micro. But the smallest instance types are more than enough to run our sample application. And then once you get to this point where you have both layers created and your instances are spinning up, then you're done with this exercise. The instances will take a few minutes to set up and you can work on the next steps while they do. So the question was about the fact that the instructions say to create the instances in a VPC. So this is based on your stack settings. Whatever VPC you assign to your stack is the VPC the instances will be launched in or if you are in USC S1 without a VPC, they'll just be launched into EC2 classics. So if you take a look at the instance creation screen, you'll notice you can choose the subnet that it goes into. The default subnet is going to be fine for all of these and this is just where in the VPC the instances go. Does that answer your question? Yeah, so the question was that I mentioned this was running on Chef. And so what is going on during the running setup phase? So I'm going to go to a different screen on here for a moment. That I think will help demonstrate that.  So if you look at the recipes page for a given layer, it shows you during setup configured deployments and so on. What Chef recipes are running and if you click through, it'll actually take you to the OpsWorks GitHub repo. And you can see the source of all the Chef that you're running. And you could also add your own recipes during these processes. So you can add or remove anything that you want to customize how your layer works. Maybe take a look here that the MySQL layer is going to have different recipes running than the Rails App Server layer was. So one thing the layers do is define what type of recipes are going to be run on any instances that are made in that layer. So that is configured at the, it was either the stack or the layer level. And you do have a drop down selection of what type of instance or what type of Linux distribution you're running on. The sake of lab using the most recent Amazon Linux will work fine. Cool, all right, so we're going to move on to the next exercise here. And there will be a bit of a pause at the end while we wait for some of the instances to catch up and create. So next we're moving on to exercise 1c, which is creating and deploying the OpsWorks application. So one quick note when you get to the app creation about the secret key base environment variable. Normally you're going to want to run rake secret on your Rails repo. But for the sake of what will actually work for deployment, any string of letters and numbers that isn't made entirely of numbers will work. So you can write your favorite sentence without spaces. That wouldn't be a production safe thing to do before the lab if you can't run rake secret and copy that value, this will do. But you would also want to make this a protected value, since once your secret key is set, you don't want people to be able to see what it is. The other thing to note is we're explicitly not enabling SSL. So this is purely a time saving thing. And also since I don't expect everyone to bring their own certificates. Obviously in a production setting you absolutely do want to have SSL set up for your instances, since otherwise you're sending things like user registration info and passwords, plain text over the wire. But for the sake of a sample application, it will work just fine without SSL enabled. And then once you have your application created, you're waiting for this to be the result of the instances screen, where both instances are online and running. And once you have that, you would go on to deploy. So while everyone's working on that, the two most common mistakes we had when we were testing out these instructions were not setting your secret key base, which if you don't set that, you'll get a white screen when you try to load your application. Just be completely blank because Rails will fail to start running. And failing to migrate your database. Since this is an initial deployment, we do have database changes we need to run. So when you go to the deploy screen, you'll turn migrate database to yes. And then opsworks will run rake db migrate against your database instance. And if you don't do that, you'll get the generic Rails error screen when you try to load your app. All right, so once you have your deployment successfully completed, to find your page, you would click through your app server's host name. And you can click through either the public DNS or the public IP to get to the app. And this is what you should see. And once you get to this point, you're done with exercise one. And if you have a few minutes, maybe play around, register an account, make a few tasks. When you make an account, it will be helpful for future tasks. If you use an email, you actually own. This doesn't do email verification, but you won't be able to send email to an account that you don't possess with a test account in NSES. It's also worth noting that at this step, if you try to subscribe to a task update and send mail, it's not going to work yet because we haven't configured it. Yeah, and for the sake of, I'm actually not sure how SES test accounts handle aliases. If you have to explicitly verify each one, I would actually be interested to see how that works out if you try that. Yeah, for the sake of a demo, registering one account on an email address you own will work to demonstrate everything we need to do, however. So you don't have to get too complicated with your emails if you don't want to. So just for a quick check, could you raise your hand if you've gotten to the running application page? Could you raise your hand if you haven't gotten that far, but you've got your deployment started?  Okay, that's good, that's not very many people. So what we'll probably do in those cases is just get your deployment started as soon as your instances boot, and we're gonna take a few minutes explaining what we're gonna do on the SES exercise. And that can happen while you're waiting for your instances to get gone. So we'll leave another minute for that. So the question was if there's a PostgreSQL layer. So AWS Opsworks only provides a MySQL database layer, as far as their EC2 managed instances. If you use an Amazon RDS layer, you can use any of the database offerings that RDS has. So you can use MySQL, PostgreSQL, Microsoft SQL Server, Oracle, or someday in the future, the Aurora database for RDS that Amazon is building. So the question was if you can create your own custom layers. I'm actually not sure on that front. I think that maybe more designed for you can customize the configuration of layers within your stack. But that's actually a good question. I'm going to get the definitive answer on that. And I will post that up after the talk. So the question was if you have a MySQL instance running on EC2, how do you get it so that the app can use it? So the way that Opsworks sets things up for you so that the database just works when you deploy is it uses the configuration values of the instance in the database layer and the database layer itself to create your database.yml file. So if you don't have your MySQL instance inside the MySQL layer, then it's not going to work. But I believe I can check this for you. You might be able to actually take that instance and register it. But maybe not for that. So bring your own database.yml file. For the sake of the lab, I wouldn't recommend it. Because I think you would have to change some of the underlying Chef recipes that are going to try to write it. Given enough time, you could do that. But for the sake of this lab, I would make sure you create an Opsworks owned MySQL instance. All right, so we're gonna take in our show of hands. Who has not started deploying the app yet? Okay, so we're gonna start on the explanation of the next exercise. And there should be time to catch up there. So the next exercise is sending emails using Amazon SES and the new AWS SDK Rails gem. So the sub exercises here are doing the configuration necessary to run the AWS SDK Rails gem, verifying an email so that you can send to and from mail for that with SES. And then we're gonna talk about how we configure an Opsworks IAM instance role profile. So the SDK has permissions to use Amazon SES to deliver your mail. So how do we change our application to be able to use the AWS SDK Rails gem? Again, apologies for the size of the screenshot here, but it's a one line change, so I can just explain it to you. If you require the AWS-SDK-Rails gem, prefer that you have the dependency locked to version 1.0. That's all you have to do. All of the, that's all you have to do in code. The configuration, creating the delivery handler, that will all be done for you by the SDK. As you're gonna see when you get into the exercise, all you need to provide is an environment variable for the AWS region you want the SDK to run in. So if you move to exercise 2A in your instruction sheet, we're gonna pick up from there. So, no, you don't have to. So this is actually a good question, let me repeat that. The question was, if you're using the AWS-SDK gem in your gem file, do you have to remove it? So there's two possible cases here. One is you're using the AWS-SDK gem version 2, in which case that is also what the AWS-SDK-Rails gem uses. And there's nothing you have to do, they'll just work. If you're using AWS-SDK version 1, it will still work. The V2 and V1 SDKs can coexist in the same project. And the reason this works is the AWS-SDK-Rails gem does its dependency on the highest level sub-gem of AWS-SDK, the AWS-SDK resources gem. So even if you depend on AWS-SDK version 1, you can use both in the same project. Does that answer your question? Excuse me. So one question I would ask is that, can you raise your hand if you did not create your stack in the Oregon region? Cool, so pay attention when you're creating the AWS-region environment variable. It should work in any region, although it'll be sending emails from a different region than your app is running in. But it's a good practice to have the AWS region be the region your stack is running in. So, yeah. So if you created it in Northern Virginia, which is probably the second most popular option, then the region you're looking for is US-E-1. If you created it in something other than that, then let us know. And then you don't need to do a deployment for this step because we're not using the SDK yet.   I have known people who can catch up pretty quickly on what we're doing, but if you're just behind on the explanations, go ahead and work through the instruction sheet, which is one of your seat table mates should be able to give you. And then this will obviously be up on video so you can catch up on what we've been talking about up until now. So could you guys raise your hand if you have not added the AWS region variable to your application yet? So that is a availability zone. So the question was, does it matter if it's US West 2A or 2B? Those are availability zones. What you want to set is the region. So you do not want the A or B on the end. That won't work. So for Oregon again, that would be US-West-2. So the next exercise 2B is to set up your email for testing with Amazon SCS. So unless you have an existing production account, you essentially have to validate every email address that you send from or send to. We're going to set an environment variable for what address you're sending your email from, which should be one that you validate and own. And for the email you send to, that's going to be any account that you register inside your sample application. So that's the next exercise, and we'll have a few minutes for that. So the question was, what you have to do for this? So you go first to the Amazon SCS console under the verified email addresses link. There's a direct link to that inside the instruction seat, although fair warning, verified addresses are per region. So you want to make sure you're using the same region you set as your AWS region variable. And once you request to verify an email address, you have to go to that email account and click through the link. Once you've done that, it should show as verified in the console. Nope, that's it. Yeah, so then the next step you're going to do is the email handler inside our source code expects you to set the environment variable from email so that the action-mailer handler knows what email you're sending mail from. So you just configure that to be a verified email address that you own. Right, so I'm going to show how we do that here. So if you go to your application and you click edit, you would add a environment variable from email and have that be an email you verified and now, I'm sorry, you don't need to stop the app. But before it will take effect, you will have to redeploy it. So you can't deploy the app because it's running? That is strange because that's working for me. So I want to take a second to come look at that. For a application? Are you trying to edit the instance or the application? So just to follow along, if we go to the app screen and you're editing the application that requires you to stop it. So my best guess before I come down and take a look at it is you probably tried to stop your instance, which you don't have to do. So just to recap, I think my instructions were, sorry about that, unclear on this part. When you are editing your application, you are not editing your application server instance. You're editing the opsworks application itself. So if it's telling you that you need to stop an instance, you're on the instances editing screen. Follow the navigation bar to the apps editing screen. And then the exercise is done as soon as you click this link and have started a deployment. So I see a couple questions. So sandbox access means you have to verify every single email address that you send from or to. It just means you do not have production access. So if you have production access to Amazon SES or certain responsibilities about things like how often you get reported for spam, how often your emails bounce, and you have to apply for that, with a test account you just verify that you own every email you send from or to. So just go to the drop down and move to the Northern Virginia region. So you want to verify your email address in the same region that you created your app in. So if you look at the SES console up on the screen, there is a drop down where you can pick which region you want to run from. And this region should match the AWS region that you set in your application. But as you can see here, I have the same sandbox access on this account. So when you change, did you subscribe to the task first? That means you haven't configured email yet. So when it tried to send email, the application blew up. So that should stop happening as soon as we finish this exercise. So by default you have test access or sandbox access to Amazon SES. So the API will check the emails that you're sending from and that you're sending to, and requires that they are all verified by you. So in this way with a sandbox account, you can't send email to random other email addresses. So within Amazon SES, you would ask your account to be authorized to send email in production. So there's a form within SES where you can do that, and it cuts a ticket with support. Yeah, I believe you still have to verify your from address, but then you'll be able to send to anyone as long as you follow the rules associated with that. Right, so in this application, if you register an email address that you don't own, it just won't work to send email to it. As long as you've also verified the to address, if you had production access, then you can send to anyone as long as your from email is one that you own. Does that make sense? So who has gotten to the point where they've deployed with their AWS region and from email set and has validated an email address? So just a bit more than half of you, so we'll have a few more minutes for that. You had a question in the back? So have you gotten to the identity and access management step yet? So you're not gonna get emails after finishing this exercise because by default, the instance profile that we're gonna talk about next has permissions to send to absolutely nobody or to, it cannot make any API calls. It's kind of a principle of least privilege for your instances, so we're going to explicitly authorize our application server instances to make calls to Amazon SES through the SDK. So once we've finished the entire exercise two, that's when email sending will work. So if you're running into a problem that you can't identify, so the first thing if you're running into a problem is raise your hand so one of us or Trevor Lauren can come see if it's a known issue. Otherwise you would use the SSH key you created and you can SSH onto the instance and look at the Rails application logs. Emails will not work yet. After exercise 2C, they will work. So raise your hand if you've not been able to deploy the new environment variables yet. So we're gonna move on to the next exercise. So what we're gonna look at now is giving the OpsWorks IAM instance role permissions to use Amazon SES. And this is the last thing that you might be getting errors on if you've tried to send email to this point. So for a bit of background, the reason that this is necessary, remember in the beginning when we created a stack, we created IAM instance roles that were attached to each instance in your stack. And the AWS SDK can find and use that instance role as credentials. But by default, you have permissions to make absolutely no API calls. The only permissions it has is a trust relationship with OpsWorks for the OpsWorks agent to run the operations it needs to run. So any API calls you want to enable your instance to run, you have to explicitly allow. And that's what we're doing with this exercise. And then remember on this screen, I do have a screenshot for this, but you're looking for the OpsWorks EC2 role, not the OpsWorks service role. Cuz this is the role that the SDK is using to get its credentials. And then as soon as you've attached the Amazon SES full access policy, you're sending an email should work. You don't have to do a redeploy, it takes effect immediately. So once you've subscribed to task updates and changed a task state, so I may have done something wrong myself. So if I look at the EC2 role, I've applied the full access. I used the wrong email here. That is not an existing amazon.com email address. So let's try that again. Dangers of live demos. So now that is working and if I check my email, we have a task update email sent.  And that should be the same email user account you sent to. So my attempt broke because I accidentally autopiloted and wrote at amazon.com instead of at gmail.com. Which is not a verified address, so it did not work. So really quickly, we have about 20 minutes left. So I'm gonna take a minute to finish some of my explanations. And then we'll be hanging around in this room and then out in the hall if we want to keep going. So I wanted to talk really quick about what we did in the application in order to configure Rails to use the SDK as a action mailer delivery method. When you require the AWS SDK Rails gem, it creates a symbol AWS underscore SDK delivery method. And that is configured to use the AWS SDK's Amazon SES client. Specifically the send raw email method as the delivery method for action mailer and that will work. And that's the only change you have to make. You do that in your configuration for any environment that you want this to work in. That in making sure your email addresses are verified and that you have permissions on your role to make this call. So there is another exercise which we don't have time for in this lab. But it doesn't take long to do, so I'd recommend checking it out. And that's configuring Ruby on Rails asset pipeline to use Amazon CloudFront as a CDN. The code change in there is really simple. We look for the asset host as the environment variable CDN domain. This is working in your deployment because right now you didn't set it, so it's nil, so it just uses your application. So if you look at your source HTML, you'll see it's pulling from the host that you're running on. So if you look at the bonus exercise and work on that, you'll end up creating a CloudFront distribution, which does take about 15 to 20 minutes, which is the reason we're not doing it now. And then you configure the CDN domain to be the domain name of the distribution you created. And then once that's set up, you'll see that the HTML is pulling your static assets from the CDN domain you've created. And we have wrote a blog post about this if you're interested. So we mentioned that we were making a few simplifications for the sake of a lab. It is worth noting that you can take this a lot further. So what I kind of diagrammed out here is a bit more of a productionized OpsWorks creation. So you could have this CloudFront CDN. You could use a product like Amazon Route 53 to set up DNS. So you can put your CloudFront distribution behind a CDN domain. And you can point other domains to parts of your application. You can use elastic load balancing to load balance across many app server instances instead of a single instance. You can set up time based auto scaling of your app server instances. So if you know that every night at midnight you get a ton of traffic. You can set that up to scale up new instances in anticipation of that traffic or load based scaling. So if you get hit really hard, new instances are created as needed. So you had a question back there? I'm sorry? So the question was what is the CDN? And that's a content distribution network. So when you use Amazon CloudFront, you can set up your application as the origin server. So Amazon CloudFront had the last time I checked. And I say that because last time I said it I was wrong and they had added more edge locations since last time I checked. They had 53 edge locations around the world. So you could be running your application server in Oregon. And you can have a person from Australia visit your website. And the static assets you have such as large images could be cached in an edge location in Australia, significantly reducing the load on your servers and the page load time. The other thing you could set up is RDS as your database. And you could have, for example, automatic fail over to a standby instance in another availability zone. So in the off chance that an entire availability zone goes down, your app can fail over and keep running. So this is what you can build. And what I hope you get out of this is that what we did build gives you the knowledge you need to keep iterating on it and build production ready systems using Amazon Web Services and Ruby on Rails. So definitely keep in touch with us. We'd love to hear your questions. We have a Ruby developer blog and we would love to hear your ideas for what you would want us to cover and what you would want us to talk about. And thank you very much.


Relatives on August 5 were mourning three people killed in India's Manipur state, as fresh violence erupted amid a vicious sectarian conflict that has claimed the lives of over 180 people since May. The three people were killed on August 3 night and belonged to the majority Mekha community in the state's Beshnupur district, a police spokesperson said. A spokesperson for a Kuki civil society group said it did not have an immediate comment on the latest killings. Violence erupted on May 3 in Manipur after a court ordered the state to consider extending to the majority Mekha population special economic benefits and quotas in government jobs and education that up to now have been reserved for the tribal Kuki people. The Kuki civil society group said it did not have immediate comment on the latest killings. The Kuki civil society group said it did not have an immediate comment on the latest killings. The Kuki civil society group said it did not have immediate comment on the latest killings.


the substantive testing of testing all the transactions and testing the account balances. So we're hoping to do test of controls so that we can determine that we can rely on them to some degree, reducing the amount of detection, the amount of substantive testing we'll need to do. And then we'll set and document the control risk for the purchasing process. So that's gonna be our ultimate goal for the control risk, we'll set the control risk. And those are the two factors that are kind of controlled by the company, inherent risk by the business that they've chosen to be in, the process that they have set up for it and control risk, meaning the controls that they have put in place in order to safeguard against the inherent risks. Purchasing process, control risk, information system, auditor will obtain the information below for each major class of transaction in the purchasing process. So we're gonna go through this process, we're gonna obtain this information related to it, the initiation process for the purchase, cash disbursements and purchase return transactions. So we wanna know about then the initiation process, the cash disbursements and the purchase return transactions, the accounting records, supporting documents and accounts that are part of the purchase process, cash disbursement and purchase returns. We wanna get information related to that, the flow of each type of transaction from initiation to inclusion in the financial statement. So how does this flow through with regards to one, the initiation all the way to the financial statements, computer processing data should be included in this process. So note that of course the IT will be involved in this and we may need IT professionals to help us look into the system to make sure that we can understand and be able to audit the system, give us the rights to basically go through and test the audit within the system and test different types of controls the process used to estimate accrued liability. Purchasing process, control risk assessment. After testing controls, the auditor will set the achieved level of control risk. So we're gonna obviously test the controls then we're gonna set the control risk. If tests of control support the plan level of control risk, no modifications are necessary to planned detection risk. So if we don't have to make any modifications to the detection risk and we can move forward with everything as we planned the auditor will process with the substantive procedures as planned, meaning we're gonna say, okay, we're at the level of control that in the control risk that we had determined it to be therefore we can move forward with the substantive tests as planned. When tests do not support planned control risk so what happens if we test the controls and they are below what we expect them to be the auditor lowers the level of planned detection risk. So remember what we're talking about here with these it's kinda easy to see what we're doing relationship wise but it can be difficult to know which direction these things are going if we were to be tested on it or just to talk about these type of factors. So obviously what we're doing is trying to rely on the controls if we can rely on the controls if they're good controls then we're gonna do less substantive testing. That's fairly obvious, but what does it mean to have the control or hopefully by now we've talked about it by. So what does it mean for the control risk factors? Well control risk is the risk that the problems will not be detected by the internal controls that are set up. So therefore if we're not relying on if we cannot rely on the internal controls the risks that the controls are weak are gonna be higher. That means that we're gonna increase the control risk because the controls are weak, whether they're not good therefore we increase the risk factor. The control risk is gonna be higher because the controls are not going to detect and the detection risk then we're also gonna, we're going to set at lower because what we're trying to do is say the detection risk is gonna be the risk that the audit test, the substantive test the test we're gonna put in place are going to not catch the error. So and that means we wanna make that then we wanna do more substantive testing which will lower the risk that our detection risk wouldn't detect the error. So we can't rely on the controls, control risk goes up we're gonna increase control risk and therefore we need to make detection risk to go down to make the overall thing basically balance out. So we're gonna decrease the detection risk by doing more substantive testing.


Can you explain us what naloxone is? Naloxone is a medication that has been used for many decades. It is used as an emergency antidote to reverse the symptoms of an opioid overdose. Heroin goes to a center called the Pons where the respiratory center of the brain is. Heroin works at that center and depresses it.  Overdose is a leading cause of death among people who use drugs. In countries where that's recorded well, we see that overdose is a leading cause of death among youth. In New York City, there are actually like far more deaths from opioid overdose every year than there are like murders and suicides. The most important thing to do for overdose is naloxone. The medication has got to be the backbone of any intervention once the overdose happens. There are two types of kits that are generally used in the United States. One comes in either a one milliliter vial like this or a 10 milliliter vial which looks similar but bigger. And that one is administered with the intramuscular syringe. The other kind is for a nasal formulation which can be squirted up the nose. So this is the naloxone. This is a intramuscular syringe and you only need one milliliter. And that is ready for injection into the arms, the thighs, the buttocks, anywhere there is muscle and fat tissue. The second one is liquid that's in a glass canister and it comes in two parts. One is the syringe and the naloxone and one is what's called a nasal applicator.  And it's ready to go to the nose. Five people myself. The first one was a woman who had come and her boyfriend had come to our outreach a number of times. She was running through one time and she heard us talking about overdose and naloxone and she mentioned to her boyfriend one day they came to one of our sites and got some syringes and other equipment they went to inject and she went out. He was horrified. She was unconscious and she was turning blue and he didn't want to bring her to the hospital for fear of the police and being charged with murder which happens in Chicago. He drove back to our site remembering what she had said about overdose. She was crying, please help. We went to the car. She looked dead as dead as anyone can look. The first thing you do is you check to see that the person doesn't respond to painful stimulation such as knuckles on the lips or the chest. She did not and so I drew up a cc of naloxone and injected it into her shoulder. The chair back in the passenger seat and I breathed for her maybe three or four times and she woke up and it sounded like this. You know just like a baby being born or someone splashing you with cold water. And then I spent the next half hour with her and her boyfriend teaching them about overdose and how to help each other should it happen again. And it did. It happened a few times with them and they revived each other. They're still alive and happy and healthy today. Relatively new practice that has proven to be quite effective is the distribution of naloxone directly to people who use drugs previously. It was available and it's been available for a long time for hospital based uses. But what we see is that most of the time when a drug overdose occurs people are not necessarily near the place where the naloxone is available. Oftentimes there's reluctance to call for medical help because people are afraid of police interference. What we can do by giving out naloxone to the communities, the families, the friends of people who use drugs is to make sure that the naloxone is where it needs to be when overdoses occur.  There are several medical precedents for putting medical interventions into people's hands in case of accidental poisonings. Like giving people an epi-pen if they're allergic to be bites or most people when they're diabetic are prescribed glucagon which is a medication that can help them if they have an insulin reaction. So there are these precedents and both glucagon and epinephrine have far more potential for harm than naloxone does. It has no potential for abuse. It has one action only. It blocks the opiate receptor. In someone who is not dependent on opiates, you will feel nothing. It's like sugar water. You could pump a cup of it into a newborn baby and the baby would feel nothing. This is an incredibly cost-effective intervention. You know, naloxone costs a dollar a vial. So it's not an expensive thing. It just needs to become part of the way we provide services. The international research as well as the research conducted in the United States I think shows a very convincing case for the continued support of the naloxone programs. In most programs for every 10 people that you train and give naloxone to, one person will use that naloxone to reverse an overdose. So when you talk about training 10,000 people, you're talking about saving potentially hundreds of lives. In Khorogh, in Tajikistan, local NGO began to distribute naloxone of both among communities and people who use drugs as well as to emergency services. And you can see really even within the first year of their work that they've reduced overdose death almost to zero. Whereas previously I think they were having around 200 deaths a year. They have started a number of pilot overdose prevention programs in Russia which work very successfully and which have shown their efficiency during the last I think two years. Naloxone became probably one of the most popular harm reduction products in the cities. Drug users come first for naloxone and then to get other services such as syringes or drug testing or whatever. We have across the board had very positive feedback from, especially from parents of children who are using drugs where they feel empowered for the first time to have something where they can save their children's lives.  They know that. They get told that by all sorts of people all the time and they begin to believe it. When we give someone a bottle of naloxone we are telling them with actions so much better than words.


We have been thinking and worrying about climate change at Lloyd's basically since I joined, I was given the task of thinking about the impacts of climate change on the Lloyd's market and the insurance industry in general and started off by convening a report called adapting to a bust where we asked scientists to help us think through many impacts so through effective policies that we write sy'n gwazio eich dyfodol yn arweinyddol i gael gweithio. Felly, rydyn ni'n fath i'r pryd yn gweithio i'r proffwyr ond rydyn ni'n byth yma, sy'n cymryd i'r fath i'r rydyn ni'n fath i'r fath i'r pryd wedi'i gael eich ysgol. Yn ystod, rwy'n gweithi'n gweithio i ddewis i gael, rydyn ni'n ddweud y maen nhw i'n gweithio i'r cwylio, addwn ni'n ddweud yn gwneudIN, y daen chi'n gwneud, a'r cynnwys yng ngynghori panddol yn cael ei wneud? Yn wneud y gweithio, ac how is this going to change, how is this going to get up, how is it going to be worse? So, basically here we have the Lloyd's Building, which has sometimes been described as a factory for insurance. I actually like the building, it is, if any of you have been to London, it is an interesting design, but it is not liked by everyone. I think it is not overly keen on it. Masylio cyfnodol yw'r rhywun yng nglynodau yn y rymwr, яw y ddechrau, i'n hynny ein busnes yr Llywodol neu ymdweithio'r llyfriddol a'r cyflwyno gyda'r Llywodol yn yr unrhyw sy'n hynny ym 15% yma ben dim ddweud yn cynnig, ac nidam iawn i sut nesaf o'r Llywodol yn siarad. Mae Llywodol yn siarad i'r Llywodol sy'n hiad. Mae Pryddoedd yn cael ei wneud, mwy o ches arno, mor hanesaf. that comes from members and there's a whole type of members as individual names. That's what's basically in a nutshell, it's quite a complicated unusual place. The key point is it's not a company, it's a marketplace for insurance. What I want to explain here is, before everyone's familiar with a balance sheet, an insurance balance sheet is no different to any others, and then here it is nicely in balance. Mae'n gweld â'r anodol. Mae'r anodol yn gyflawni'n gweithio gerwain ar gyfer y gwaith ar gyfer gweithio, ac mae'n cael ei gwaith yn cyflawni'n gweithio sy'n ddysgu'r anodol, bod y cwmddorol yn ei gweithio sydd yn gweithio'r anodol. Mae'r anodol yn gweithio, ond mae'n gweithio. Yn ymgyrch yn gwneud o'r cyfarfod, mae'n gweithio'r anodol yn gweithio'r anodol i gweithio'r anodol. That is the assets, the claims are going to get affected by climate change. On the other side of the ballot sheet you got the liabilities there in two forms. One is premium reserves, which is the money that we hold for things that haven't happened yet. We are taking premiums for motor, household, etc. Until the accident happened we can't release that money. So we hold those reserves in the future. Ond roeddwn ni wedi cael ei gael ei gael, ac rydych chi'n ei ddweud. Ond ydych chi'n gael ei ddweud, ac roeddwn ni yn gwneud nw, ond yn ôl ond, ac yn gwneud hynny'n gyntaf. A byddwn ni'n gallu arbennig. Mae'n gael cael ei ddweud, dwi'n gael ei ddweud. Ond rydyn ni'n ddweud, ac mae'r ffordd o'r ffordd Ion yn y canfodol. Yn hynny'n gwybod i ni. Mae'r ffordd i ni'n gwybod i ni, fel ydych chi'n gwneud ond y prif. As you know, we sell a policy that we will pay you if bad things happen and you need to know that we're going to be there and the capital has calculated these days using models so we will simulate our profit and loss account over and over again hundreds of thousands of times When we do that, we will use things like catastrophe models to simulate hurricanes, earthquakes, floods etc. and also simulate other lines of business like aviation, rain etc. We'll simulate the assets, we'll do things like market shocks and all of that gets pushed together into a profit and loss number. Most of the time we make a profit which is good but then there's this long tail of losses and we have to be able to survive the 1 in 200 loss. So that's the test, that's the new Solfty 2 test that's coming in but it's also been in the UK since 2004 so we have had to survive an event on our balance sheet that would be with half a percent probability in a year. So that's how we capitalise and that's important because climate change will affect all those areas. So I'm just going to run through now the different types of policies that we sell and the different ways that climate change will affect them. So starting with the sort of in a sense the obvious thing which is the property damage. So we use catastrophe modelling and the team that I run that's one of the areas that it looks into. So we will have our simulated properties on the ground and we will simulate hurricanes that will hit them or floods and we will say given the wind speed at that location how much does that property get damaged and that will be all fed together with all the other properties to give us a sense of the expected loss and the probable losses in the year. So we asked the well-known catastrophe modelling firm so we had to look at RMS, JVA, AIR to tell us where the climate change is affecting their models. Is it having an effect yet on their models? I am sort of a mixed response which is interesting and they all looked at different areas. So some of them looked at European storms, some of them looked at hurricanes in the US, we had flooding and so on and so forth. So you wouldn't expect a sort of uniform effect. They all said which I was pleased because it's the first time as far as I'm aware this has ever been said for cat modelling firms that any trends in the data that we have seen to date will be coming through in the models by default. They tune their models using the data and as you get an increasing frequency or increasing severity so it will be through into the models. So definitely anything that we've been seeing to date will be coming through in that sort of slow data series but not explicitly. And I'm coming on to talk about hurricane except for hurricane which is being done explicitly. Then RMS in their study, and this is on Roy's.com study if anyone's interested, they said they were looking at the impact of sea level rise off the coast of Manhattan and they said that just the 20 centimetres of sea level rise that has happened since the 1950s led to a 30% increase in the surge losses. So a very large effect from a small amount of sea level rise and we can definitely say that a large chunk of that sea level rise is due to climate change, due to thermal expansion of the oceans, due to meltwaters, et cetera. So there's no doubt then that there's been an effect of insurance loss effect due to climate change. JVA looked at flooding and said over the last half century an increasing proportion of the UK's weather rain has fallen during intense wet spells. So they're starting to see and then that means it is coming through with the data so it's affecting the UK flood. The hurricane, and I'm going to talk about this on the next slide, very definite signal according to GMLs, who's a statistician in the US from a company called Climate Times. So what he's done is a very complicated form of regression which is called a quantile regression, which is where you actually regressed at sort of 25 medium, actually that's probably 25, 75, 90 and 95 or something. But you've regressed at the quantiles and it says every single quantile is showing an increasing trend. So you've got the wind speed going up and that means economic damages go up. As the wind speed goes up the damage goes up. It's sort of obvious actually because you know cap fires do more damage than cap falls, but when you see it as explicitly in the data like this you can start to build up a sort of reductionist scientific argument for the impact of climate change on hurricane losses. Then they've looked at the impact of sea surface temperature on the limiting intensity. So this says as the temperature of the sea surface goes up, so the storms are actually getting stronger. And this is not a physical model which would show that you'd expect that this is a statistical model saying it's definitely happening. So you put those two pieces together, climate change makes the sea surface temperature go up, sea surface temperature makes the storms more powerful, more powerful storms, more insurance losses. So there's a very strong link between climate change and insurance losses from hurricanes. So that's an interesting one and I do think this work is very much worth looking at. So in terms of flooding you've got saturated ground, you've got 4% more moisture in the atmosphere. Every degree centigrade of extra heat allows more water to be held up in the atmosphere. That leads to stronger downpours. It also may lead to changed winter storm tracks. So this is an interesting one. I was talking to risk management solutions last week. That was one of the cap modelling firms. And they were saying to me that the 2013-14 winter, I believe you had some big effects in Ireland actually on the coast. You had some very large coastal effects. And this was a very active, very powerful winter storm. It just didn't happen to hit mainland Europe very much. It's unclear whether that's part of the effect of climate change. It might actually mean that they're steering and missing and maybe that's a good thing. But it might also just be an anomaly in which case what we have is some very large powerful storms that are going to come and get us at some point. And then storm surges, I've talked about higher sea levels and also stronger winds. Then there's subsidence. A very interesting paper by Swissry there where they're actually saying in some parts of Europe subsidence claims are now the costliest natural hazard, which is kind of a surprise me, I have to say. This is obviously where the clay soil typically dries out in the summer and then it causes the land to shrink and then the foundations are undermined and it can cause cracking. And then heave, which is exactly the opposite in winter where they fill up again and they sort of swell up like a sponge and it breaks it in the other direction and it's constantly going up and down. So that was an interesting thing. So obviously we write these property policies. Wildfire is another example, not so big on the insurance costs compared to things like hurricanes. But you can see there that US insured losses over two side-by-side decades went up by quite a factor at 3.9 billion in one decade, 1.7 billion in the previous decade. So there are more wildfires happening partly due to human factors. We've looked into this land management schemes, that sort of thing. But there is a definite signal in there from the mid-80s onwards possibly linked to drier climate, more droughts and also more lightning because climate change leads to more lightning. So we write property policies, but I guess the key thing to remind everyone of is that those policies are typically one year at a time. So we might do construction, which might last for say six, seven years, but apart from that most of our policies are one year at a time. So we can adapt ourselves as an industry to those increasing trends. If the risk goes up then the claims will go up. Obviously the premiums would probably need to adjust and the capital held need to go up as well. So on the property damage side whilst we are seeing some impacts it may not be something we can handle as an industry but we have to be careful and we have to describe what the reputational impacts are because we have to balance the books. Our premium has to be enough to cover the risk and if the risk goes up then it's not us making more profits we just have to cover the risk with those premiums. Liability is a very interesting area. So we have done a number of reports in the past. This one, Litagin and Business Transatlantic Trends looks at the US sort of compensation culture and how it's been exported over the years around the world and starts asking whether this coupled with climate change will have an impact. So a very interesting paper from the Geneva Association which is a think tank. I don't know if you've heard of them but they're based in Geneva. And they kind of are on the board are all the CEOs of major insurance companies around Europe. I think it's worldwide actually. They came out with a very interesting paper which I thought was quite significant that a body like that would come out with something like this and they said the innovative application of liability theories and the inevitable carbon footprint of all industries threatened insurers with the exposure to liability claims that will be pervasive and difficult to avoid. Through traditional exclusionary clauses. So we have exclusions on our policies that says pollution is not covered. What we call slow pollution. So we will do sudden and accidental, an oil rig gets tipped over and its fuel is spilled over the ocean. If it's covered we will pay. But slow pollution where it's a natural maybe a toxic chemical tank that's dripping into the ground we've learnt our lesson there. We pay lots of money in the 80s in the US and that is not covered. And the question is climate change should be considered a slow pollution we would argue for. They're saying well traditional exclusionary clauses may struggle to keep the tide of liability at bay. This is unclear. So sort of obvious here we sell different policies. We sell general liability policies where ordinary people blame things and things and sue them and we'll pay out on most basis. So there was the Kerma versus Murphy Oil case earlier this century where they argued that this particular oil company's activities led to the potential for Hurricane Katrina and they were trying to argue that Katrina was stronger because of climate change and therefore part of the damages they suffered should be paid by Murphy Oil. At the time defended successfully by Murphy Oil so it didn't lead to a claim. Directors and officers is another one where the shareholders might blame the managers if they acted in a way that was deemed to be negligent. And the question is of course negligence is decided after the fact when society's attitudes might be different in the future than they are today. Professional indemnity we provide cover for and this would be where people blame their advisers. So architects, architets, city planners you should have thought about this, we knew about climate change why was the building not built stronger better and it was your fault that's the argument of course there'll be some potential for paying out and claims there. So far cases have been defended and as I mentioned we would hope to think that they're excluded but we're looking at that very carefully. And then another area is political risks. We provide contracts for political violence and political risk. So things like seizure of property where there's a regime change and the government decide that they own all those assets now then that would be covered. Contract frustration again where you can't complete on the terms of your contract because there's an embargo on the country terrorism war on land. So lots of covers are provided against the risk of political shocks. So we would argue that climate change is leading to an increase in tensions globally due to water disputes, energy shortages and migrations and lots of land. So we've done several reports we've done a report on water and we've also done a report on climate change and security. There it was very interesting to me sort of obvious but the population's actually gone up by a factor of three in the last 60 years which is a huge growth in population globally and how have we managed to achieve this as a human race and it's because of the green revolution's evolution. So higher yielding strains of crops that are saline resistant and sometimes disease resistant much greater increase in the use of fertilisers and a 300% increase in the use of irrigation. I don't know if you can see there but as it says the irrigated land is only 15% of the area of the land but it's actually 40% of the world's food comes from irrigation. It turns out that a lot of that irrigation is from fossil water which is water that is in aquifers that don't refill so they were sealed off tens of thousands of years ago and they are being drilled and the water is extracted and used for irrigation but once it's gone it's gone. So that's a risk I think in terms of the kind of carrying capacity of the environment. And also fertilizer production uses natural gas so there's a sort of a fossil fuel dependency here as well. If you look at food price indices they were pretty steady for quite a couple of decades and then there was 2008 and 2010 very large jumps up in food prices. 10 was caused by the Russian heat wave which has been linked to a blocking pattern and climate change and it led some people argue to the Arab Spring because Egypt and other countries were trying to keep the price of bread down and affordable for the populations but the price rises were just so large they couldn't control it. Now this is not a certain fact of course but some academics are arguing that they are linked and we are looking at food security now as part of our work. So climate change, general consensus, the impact on food production will be negative impacting on all areas of food security and we've done another thing I just want to throw this in of how connected all this is because we're always looking out for the next asbestos. Asbestos hits our industry very hard in the 80s. Synthetic biology is genetic modification on steroids basically and it's where you can use computers to design DNA and actually create it in the lab and then insert it into things. There's sort of a strong desire to use synthetic biology to make seeds more heat, drought, disease tolerant which is good and that's progress but of course our concern would be how robust will these new seeds be that nature has a habit of evolving into very robust, tolerant situation and if you use untested, untried things how risky will that be and might we end up with some liability coming over that as well. So we're looking at that we're looking at bread basket failure as a scenario at Lloyd's and thinking through how will that ripple through the economy and how will it affect political risk all the world. Another point about water is if people might start to use it as a strategic weapon and in our report we were saying that building a dam could start being seen as an act of aggression and there's some key risks in various river basins Nile, Tigris, Indus, Mekong but just looking at the Nile for example if you look at what the Egypt could support without the Nile there might be about 6 million people but their actual population is 80 million and upstream of them Ethiopia in 1950 had a population of 18 million now we're up to 80 million and is projected to 2050 as up to 180 million people so rapid population growth there and of course that means that they want to take the water at the source of the Nile and presumably deplete its downstream potential so that's a potential conflict the sort of thing that we're looking at here we know about population and the thing I would like to get across here is everyone talks about 9 billion by 2050 but we don't know that it could be 7.4 according to this study it could be 10.6 so I think there's a lot of things that are taken as just oh that's the answer, it'll be 9 well it might not be 9, it might be 10.6 in which case the risks will be magnified and even worse so we are keenly aware of uncertainties in all these projections and then there's this idea of megatrend refugees which I won't go into detail I think it's fairly obvious people moving across borders and increasing those tensions so on marine risks we write a lot of shipping insurance around the world and how would climate change affect that I mean the ships are supposed to go on the water there'll be more water but that'll be okay for them so how can it affect them well what we're thinking here is that we know that the Arctic and the sea ice is being lost at a rapid rate in the Arctic this is shown, we've shown the area lost over time and you can see it's sort of slowly diminishing and we reckon that sea ice will be all gone possibly by 2030 or a bit later in the century this will open up shipping routes that haven't really been available to normal transits to humanity it'll radically change some of the routes and trade which of course could make it more efficient maybe even fuel efficient which would be a good thing but what could the risk be well we've looked at this in our Arctic opening report basically the Arctic is a difficult and dangerous place to do business in you don't have the infrastructure there if you do have things like the usual boating accidents that you'd see all around the world it'll be much more difficult to remove the wreck to handle the damage, to rescue the people and also the environmental clear up will be much more difficult as we saw with the Exxon Valdes which Lloyd's paid a huge amount of money on in the early 90s so for example oil which will be degraded by bacteria in the Gulf of Mexico very quickly so after the deep water horizon the bacteria got to work on those oil slicks and started cleaning them up I'm still plenty around of course sadly but very quickly it turns it will be got rid of whereas in the Arctic oil can hang around for decades causing more and more environmental harm and then from an underwriting point of view the question will be is this risk there for the same marine risk as we would have for normal shipping routes and we would argue no the risk is higher okay what about investments so this I'm not trying to claim that 9-11 had anything to do with climate change but what it does show is how large political effects can have very big effects on markets I guess fairly obvious point so you have 9-11 at sort of more or less the top of the investment bubble and then you had a rapid fall in the stock markets I was at a life company at the time and we saw the market go from sort of six and a half thousand nearly seven thousand the book see right out of about three thousand and that left had a very big effect on insurance companies particularly life companies they had a lot of investments in equities at the time and their balance sheets were severely stressed severely tested so the point of this really is just to say the sorts of political stresses I was talking about earlier can have economic impacts and they will have impacts on the investment side of our portfolio as well and then the other area we're looking at is which I believe you've had a talk on recently so I won't spend too long on but stranded assets so this idea that to keep within two degrees you can only really spend about five hundred and sixty-five to eight hundred gigatons of carbon and yet the reserves on company balance sheets are around about three thousand gigatons so multiples on the oil company balance sheets then can actually be spent if we want to keep to two degrees target and what I suspect might happen with the increasing understanding of climate change for example you were talking earlier about the agreement between the US and China as people become more and more accepting of climate change at some stage people will realise I suspect that we can't burn all this carbon and that must I would imagine have an effect on the balance sheets of those companies so if you're investing in those companies you could see a significant right down of value I believe that's what was said to you before so we're thinking about that in terms of our own investments but also back to those liability calculations if there's large amounts of value taken off stocks who's going to be suing who and who's going to be blaming who so just to sum up so far we've got our nice balance sheet in balance but we're saying that the physical damage will affect our liabilities it will affect the premiums we charge so we'd have to hold more premium reserves it'll affect the capital we'd need to hold because events will be larger and we have to prepare for those larger events so the capital needs to go up and just at the time when you're really having to increase your assets our asset values potentially could be going down because of the investment impacts that I was describing earlier of course it won't become out of balance because that would be an insult for the insurer but what it would need to happen is you actually need to invest more on the asset side to counter out that there okay so how much longer should we carry on I think I mean maybe three or four more okay so just to say we haven't been taking this all on board and not doing anything we've actually been taking action and one of the things we did along with a number of other companies and about the Prince of Wales was to start something called ClimateWise in 2007 and this is a collaboration between many insurers now sort of global collaboration ClimateWise has a set of six principles at its heart which says insurers could be part of the action against climate change so we've got share our risk analysis with people, work with policymakers so the governments around the world tell our customers about the risks and try and explain them to people think about our investments and we can do about it think about our own staff and carbon footprints and then finally there's a governance piece which says this is an important board level topic so somebody at the board has to be responsible for it which we have and that's actually my boss Tom Bold ClimateWise has done things like sustainable claims management so we're trying to say if you have new for all policies and repair rather than replace we can be more sustainable in our own footprint we've also done things at Lloyd's we did a paper managing the escalating risks of natural catastrophes in the United States where we were trying to sort of softly lobby the government over there and say that I mean it's a bit self-serving inevitably but we're saying that government intervention in private insurance markets should be kept to a minimum because when governments intervene there's a danger that the true risk price isn't conveyed to the public and that can lead to the sort of behaviours that actually encourage people to take risk rather than to protect themselves and risk based pricing is fairest eventually although you may need to protect poorer communities in the interim and the government does have an important role to play in publishing things like maps, flood maps and that sort of thing and also in terms of design of buildings and where to build and then the Geneva Association that I mentioned earlier today have recently ratified a Kyoto Statement that they made back in about 2008 and this was signed by about 80 of the CEOs of the largest insurance companies around the world similar to climate wise it made some number of statements we were committed to enhancing our research promote litigation efforts etc so we've tried to be on the front foot as an industry and tried to say that we will play our part but we also need to think about protecting our own balance sheets and we've done work on valuing adaptation so you can use our modelling capabilities to say if the sea level does rise or the winds get faster or whatever and if you adapt your properties in certain ways how much can you reduce the risk so this says if you've got a hundred of current risk and then the sea level rises by 30cm more this coastal property the risk goes up to 186% of it's current levels on an annual loss basis but actually if you just and this is probably a bit easier for new build and existing properties but if you build them on 50cm stills you could actually which they do in the Caribbean you could reduce the risk down to below current levels so appropriate building adaptation can actually protect in the least in the short term against the rising positive climate change and then finally in the longer term I'd like to say that we can take an insurance approach to thinking about climate risks so there's all this debate about whether we should spend now to protect future generations and people do cost benefit analyses which in my view are largely quite flawed because they aren't thinking about future generations and they are thinking about the utility of the society, they're often just thinking about the impure money terms, discounted money which is I think a flawed approach what this shows from the IPCC report is how on the representative contribution pathway we're heading for four degrees by the end of the century which is a horrible prospect globally and there will be some very largely affected countries around the world but this work by a group called climate prediction.net which I know some people there they've actually looked at the uncertainty in all the parameters of climate models the things we don't know and said well supposing we sample from that uncertainty how big really is the width of the temperature rise and actually it goes frighteningly up to even 10 degrees now okay that's not very likely but the point is you can't rule it out because there's a lot of uncertainty and if you think like that you say well what would you do with insurance you buy insurance against the risk of your house burning down the risk of a very large loss it's not very likely like this but it's worth protecting against because it'd be so bad if it happened and I would argue that the same should be true with climate change we should spend the money now on mitigation to keep within those carbon targets for the whole future okay which I've just said so in summary one we have to hold capital for extreme events and climate change will affect that two there are a number of foreseeable of depths of various time periods and I talked about property liability political risk marine so there was lots of areas of the policies we saw investments may be affected too and consensus that we're seeing US, China etc could lead to only revisions of value this treble whammy on the balance sheets you've got your assets, liability and capital we've taken some action as an industry climate wise, Kyoto etc and we can use our expertise to help understand the value of adaptation and finally we should take an insurance approach to avoiding these risks thank you very much


A new initiative has been launched by the Ministry of Equity, Social Justice and Empowerment to encourage older persons to take up golf as a way of improving their physical and mental health. The initiative called Golf for Older Persons is a collaboration between the Merriam Home, Help It St. Lucia and the Sandals Foundation. The aim is to provide older persons access to a golf course, equipment, coaching, and create a supportive and friendly environment while enjoying the outdoors. On October 31, 2023, all suited in their golf attire, all the persons embarked on their one-hour activity at the Sandals Golf Club in Carpestate, Grosile. Satisfied with the outcome of the activity, Social Transformation Officer and Golf for the Elderly Persons coordinator, Shalina Manelitien. The Ministry of Equity, Social Justice and Empowerment partnered with the Sandals Foundation, Help It St. Lucia and the Merriam Home to commemorate and to conclude the month of older persons. This activity is to just teach them the fundamentals of golf and to take them away from their daily routines and just to have an enjoyable moment learning a new sport. As a low-impact sport, golf provides an opportunity to socialize with others and an opportunity to make new friends. It enhances the cognizant function of the memory by stimulating the brain and challenging the mind. The low-impact sport can also be an effective treatment for anxiety, depression and early signs of dementia. I think this is a wonderful exercise, an exercise in concentration for us who are way above 50 and you know it helps you to concentrate, helps you to think because you have to make sure that you're putting properly and correctly. I think we should do this more often anyway. This is the first time but I think we should do it more often or get more persons involved because it does not make sense staying at home doing nothing when you can be here exercising and concentrating. Noted Helpage member and participant Karl Marshall, participant Mirian George, shared similar sentiments.  No, no, no, okay, okay. So it is good to go come around like this and relax yourself. The game of golf has been around for centuries and as an elite sport is played by millions of people worldwide, both professionally and recreationally. While efforts have been made in recent years to make golf more accessible and inclusive, the sport still struggles with representing a diverse ethnicity of people of all ages. Sanders Golf and Country Club coach Heniks Joseph says, As before, golf was not available to everyone. It was only available to the elite person but right now Sanders has taken beyond that and has opened up to the public of St. Lucia. So if you want to enjoy golf or have some fun or try something different, come to us at Sanders St. Lucia. Come to Heniks, your golf pro. We've been teaching golf from 1998. So it's a matter of 25 years teaching golf. Lots of experience out there. You will enter yourself. We're going to make this epic. According to a 2021 report by the National Golf Foundation, the percentage of senior golfers in the Caribbean is estimated to be 2.85%. The study also revealed that playing golf may help older adults live longer, reducing the risk of early death by 15%. From the Ministry of Equity, Social Justice, and Empowerment, Jovrey Marius.


They just ran this right into their clothes, folks. Gold. Gold contract up $13.10 at 2,053 an ounce, get silver up 25 cents, $24.36 an ounce, light sweet crude up 97 cents, $73.44 a barrel, notes and bonds, a 10-year note, up five ticks, trading out at the 112-12, 30-year up 12 ticks at $123.20 in Kingdollah. Kingdollah's down 416 ticks, trading 102, 146, Euro 109, Yen 143, British Pound out here at $127.01 at U.S. dollar. We can overtake a look at the S&P first. Come on, baby. There we go. We take a look at the spy, bottom line, they ran it, they ran it, I suspect they're going to keep running it. Now you get the volume dropping off, there's no doubt about that, man. The volume's dropping up, but all's you have to do, folks, is go back to, I'm going to put this weekly up there for you, and you can see it's, you get a weekly ABC structure up, it blew the B point away, blew it away with volume, you know, so the real question is that, you know, you're at 474, that ABC structure is 502. 502, you can see, 502 is only 20, 25, well, 27 points away, okay? We're up three points today, you know. S&P can run, you know, easy five, six, seven points in a day, you know, and I suspect will happen there as the momentum builds, that's what we're going to see. And then, yeah, you'll get a retracement at some point, but, you know, you've got to remember something. The A to B on an ABC structure is a straight line move. The B to C drives people crazy, because all over the place. The C to D is a straight line move, so we take a look at the Q's, we get the same setup inside the Q's, we're at 409, and when I was talking about the aspect, you know, by the way, of the, with Basil, and with Tim, is that the, between the 94 to 96 to 98 market, you did have a dynamic change in technology. Technology's running everything now, folks, okay? You know, I hear these people say, oh, the Magnificent Seven, the chips, that's going to stop. It's not going to stop. The chips are the name of the game in a monster way, folks, not in a small way, okay? The whole deal, and now with Generative AI, it's going to be everywhere in 2024, and it's going to produce huge amount of production. That's the bottom line. And if you didn't know this, Amazon is free courses, free on Generative AI. You can go to the Amazon register, and you'll see what I'm talking about. Have a great night, folks. Have a safe one.