Don't forget earthquake resilience in COVID-19's wake
Each year, on the third Thursday of October, the Great ShakeOut Earthquake Drill takes place. Nearly 10,000,000 U.S. participants have registered this year, and globally, there are over 17,000,000 registered participants. Most people will practice how they will Drop, Cover, and Hold On during a large earthquake, which takes roughly one minute. After months of planning, organizations will conduct more extensive drills, or tabletop exercises, requiring up to a full day.
Aon’s Impact Forecasting indicates that since 1980, the global economic impact from earthquakes is nearly $1.4 trillion, for an annual average of just under $35 billion. For the same period, insured losses totaled $157 billion. (Numbers are inflation-adjusted to today’s dollars using the U.S. CPI). Earthquakes are an example of a low frequency, high-consequence events. Furthermore, as stated by Aon’s Peter Jagger, Managing Director, Property Claims, and head of Aon Rapid Response team, “earthquakes are especially challenging for damage assessment. Damages can be unseen and structural assessments can take days, if not weeks. You should take the time to prepare, including having the resources needed to perform damage assessment and quickly enact a recovery.”
Currently, the biggest global disaster top of mind is the COVID-19, in terms of both lives lost and economic impact. Small businesses and global corporations alike have suffered severe financial losses. But beyond the pandemic, according to Aon’s Weather, Climate & Catastrophe Insight: 2019 Annual Report, economic losses from natural disasters topped $232 billion in 2019, bringing to close the costliest decade for natural catastrophes. Business Continuity Management programs have been stressed and opportunities for improvement have been exposed. Low frequency, high consequence events may not be receiving needed attention. Practical solutions such as stockpiling of essentials, or the greater use of our imaginations while walking through possible scenarios, might be reconsidered. Also, and perhaps as important as ever, leveraging technology solutions could hold answers for improved response and recovery.
IoT/sensor technology, AI, modeling, mobile alert systems and more are changing the way we can prepare for and respond to events of all magnitudes. Wireless water sensors can detect leaks and excess flow in pipes. Services that use AI to monitor social media chatter can help predict areas where social unrest might occur. Drones are used to capture images post-disaster to assist in claims triage and settlement. The ability to gather more post-event data, sooner, is increasing rapidly.
When disaster strikes, senior executives at businesses and public entities must quickly implement emergency response plans to help protect employees, customers and the public, stabilize income streams and secure business assets and operations. Those executives must also provide their insurers with a preliminary overview of all damages to seek to secure the establishment of an adequate reserve and critical and sustaining interim payments are released.
FedEx Corporation is one company that participates in the Great ShakeOut Earthquake Drills annually. In addition to working with the Aon Rapid Response team, FedEx has looked toward using advanced technology to enhance their ability to expedite emergency response and recovery following an earthquake. In 2020, FedEx started installing cloud-connected earthquake sensors, developed and provided by Safehub, a San Francisco based company, in their buildings in the Central U.S., and on the West Coast, from Anchorage to San Diego.
“We work with forward-thinking technology companies, based on solid science and engineering, in addition to having practical operating experience,” said Chris Conners, Staff Director Corporate Security, FedEx Corporation. “The Safehub platform enables corporate resilience and business continuity professionals, who historically have relied on physical inspections and/or generic data from publicly available sources, to assess damages in real-time and provide management with actionable information. This combined sensor and software solution will help organizations of all types both identify and prioritize resources during a disaster and expedite recovery operations.”
Safehub employs a combination of sensors, analytics, and third-party data to provide real-time, building-specific earthquake damage information. Their low-cost, easy-to-install sensors measure earthquake ground motion and building response, as well as changes in building natural frequencies. Together, this information is used to estimate damage to the building and related business interruption losses. In the event of an earthquake, the Safehub platform sends actionable damage alerts and financial loss estimates via text messages, emails and web dashboards – all within a matter of minutes post-event.
“Our vision is a safer and more resilient world,” said Andy Thompson, CEO of Safehub. “In the event of an earthquake, organizations need timely and detailed information to get ahead of potential downtime and business interruption losses. With our platform, business continuity and emergency response professionals can understand the extent of the problem remotely and prioritize damage assessments with building-specific data.”