A panel of MMC experts has been advising clients on business continuity planning and other challenges posed by an active storm season
A panel of Marsh and Guy Carpenter experts has been advising clients on business continuity planning, compensation challenges posed by displaced or reassigned workers, protecting and recovering digital data, managing the insurance claims process, understanding the impact of new Florida legislation, and forms of capital for property reinsurance such as catastrophe bonds
This year’s hurricane season, which runs from 1 June to November 30, is forecast to be above-average with as many as 17 named storms compared with a more typical number of about 11 per season, according to the National Oceanic and Atmospheric Administration (NOAA).
“Hurricane Katrina showed in devastating detail how a powerful storm can wreak havoc far beyond where it makes landfall,” said Michael Cherkasky, president and chief executive officer of MMC. “Organisations that were hundreds and even thousands of miles from the Gulf Coast suffered financial and other losses as the storm disrupted supply chains across industries and regions, illustrating why companies must consider the full spectrum of risks they face when confronted with a catastrophic event.”
A major reason hurricanes continue to be so devastating is because of the population growth in and near US coastal areas over the past decade, noted Robert O’Brien, managing director of Marsh’s National Property Claims practice and leader of Marsh’s Catastrophe Response team for North America.
“More people mean more business, and that translates into more exposure when disaster strikes,” O’Brien said. “Companies should seek to fully understand all the issues that can prevent them from restoring normal operations – everything from knowing what an insurance policy does and doesn’t cover to what documentation they need to ensure interim insurance payments after a storm has hit.”
The MMC panel strongly advised companies to take pre-emptive action to ensure their ability to work through storm-related incidents and preserve operations to the greatest extent possible, including:
• Developing business continuity and crisis management plans; testing emergency response plans;
• Assessing the resilience of the supply chain;
• Establishing internal and external communications procedures;
• Instituting data back-up and recovery protocols;
• Assessing and understanding levels of insurance coverage;
• Creating claims accounting and filing systems for use in post-loss scenarios; and
• Becoming familiar with local government emergency response plans.