Few industries know more about the personal, economic and financial impacts of disasters – or “extreme events” as insurance experts like to call them. And few know more about risk management. Today I want to talk about both topics – an extreme event and private and public risk management in its wake. This morning you discussed earthquake insurance.
Earthquakes, like other natural disasters – tsunamis, hurricanes and ice storms come to mind – are entirely exogenous, extreme events – acts of God, if you will. They are not preventable, although their impact can be reduced by building resilience and by timely and effective disaster response.