I, along with all our employees and our many clients, am working from home. For the first time looking out across mid-town New York I can count, on one hand, the numbers of cars and people moving around at 9am.
Not since the untimely death of the Princess of Wales, Lady Diana, in 1997 or 9-11 in 2001, can I think of similar events that were as globally discussed and touched many. Although different events in so many ways, there are some similarities. With social distancing in place, COVID-19 starts and ends all discussions on the phone.
However, there is the ONE BIG HUGE difference, the economic impact the fight against COVID-19 is having. No other event has had this fast and as deep an impact globally. Most other events can be measured in a few news cycles, this event will be measured in months.
On the day of Diana’s unfortunate death, I was catching a plane to Seattle, USA, and for the next 10 days there was nothing else in the news. This despite plane crashes and other local catastrophes that just did not make it into the daily news cycle. 9-11 was similar, 24/7 back to back news updates and coverage. This COVID-19 event feels like those times.
Recent stories not getting into my news feed.......
I rang up one our Brokerslink network brokers in Egypt to discuss a fronting issue only to find out they had just suffered a huge cyclone which killed 20 people. He was still shocked about the event. I had no idea. Egypt had not experienced such weather conditions for nearly 35 or 40 years. A state of emergency began on Wednesday 11th March as the powerful storm, nicknamed the "dragon" on social media, developed over the Mediterranean Sea. This news did not feature in any broadcast or websites I usually monitor.
Here in the USA similar news stories struggle to make it on to the national stage. On the 18th March a 5.7 Magnitude Earthquake Shakes Salt Lake City. The earthquake damaged buildings in Utah and forced the closure of the Salt Lake City airport. It was the Utah's strongest earthquake since 1992, More than 73,000 homes and businesses were without power. Aftershocks continued throughout the day. If you were focused on the national network news stories you could have missed this event. This story would normally have been ‘BEAKING NEWS’ all day.
How an we change?
Our ability to predict and manage these situations is also coming into the spotlight. On the insurance side there are parallels with Cyber Attacks and companies’ reluctance to plan and or buy insurance despite the obvious threat.
This pandemic is similar there too. Just over 2 years ago Marsh, in collaboration with researchers and re-insurance, developed a pandemic risk insurance solution to provides financial protection to businesses and their global operations. Despite all the smart risk managers looking to protect their companies, sports franchises, global event’s, resturant chains, etc Marsh sold ZERO polices. Of course, now there is interest again, but COVID-19 is not covered and, I hope, the re-insurers are re-running their models!
Why don’t we listen and take action? Bill Gates saw the COVID-19 outbreak coming and he knew we weren’t prepared for it. The Microsoft co-founder on multiple occasions over the past decade talked about the potential for something like todays novel coronavirus.
His TED Talk from 2015 titled “The next outbreak? We’re not ready” is NOW being shared widely online in recent weeks given the impact of COVID-19 around the world. “If anything kills over 10 million people in the next few decades, it’s likely to be a highly infectious virus rather than a war,” Gates said during the Ted Talk. “Not missiles, but microbes.”
Two years later, he said the same thing at an event in Davos. “It’s pretty surprising how little preparedness there is for it,” Gates said in 2017. Davos is where all the ‘smart’ people go to discuss such event. However, it seems chit chat is easy, action is hard. This is the same issue Nobody likes a smart ass maybe.
This is the same issue that Greta Thunberg has, at the 2020 Davos event she tells the audience of global leaders that we have less than 8 years to save the planet. ‘Even at 1 degree people are dying from climate change,' she said. The teenage organizer of #FridaysforFuture school strikes said richer countries need to get down to zero emissions much faster. This was a year after telling business and political leaders to wake up to climate change. Ahead of a session devoted to climate change, she read out a speech that delivered her key message: listen to the scientists and act now!
ACTION is the key to all these issues and looking forward now I wonder if the World will change and focus on issues that matter and take action.
I can think of Hurricane or Earthquake planning, these don’t have the global impact as this latest event but locally can be much more devasting.
Let’s take Hurricanes. Hurricanes are a low priority with coronavirus turning the world upside down, but June 1 will come regardless of what the virus is doing.
Early climate signals are raising red flags that El Niño will be a no-show this hurricane season, a bad sign for storm-weary states that have suffered four consecutive years of above normal activity.
It is early days and some way off to June but there is a huge risk that Governments and people will be far too focused on the virus to pick up on planning for yet more issues.
For Hurricanes/Cyclones Sea-surface temperatures play a huge role in cyclone development. Simply put, if the ocean isn't warm enough, a cyclone wouldn't be able to sustain itself. 82F is the magic number when it comes to sea-surface temperatures for tropical storms or hurricanes to form.
Recent winters have not allowed our oceans to cool down quite as much as they have historically speaking. Ocean Buoys (yes we all remember the film Day After Tomorrow) record and signal these and today buoys deep in the Caribbean Sea, even at the end of winter, are still reporting a sea-surface temperature of 82°.
This is 1° Celsius above average for the month of February. While that might not seem like a lot, it is significant -- especially with this being a global trend rather than an isolated account. Check out the National Buoy Centre.
All signs are pointing toward a neutral El Nino year. El Nino conditions create more unfavourable environment for hurricane with stronger vertical wind shear and trade winds, and greater atmospheric stability over the Atlantic basin. With no or a neutral El Nino, combined with warmer-than-average oceans, one would believe hurricanes should be able to form with more ease.
Know your risks and have a plan because the Atlantic hurricane season will be here before we know it. Better still have a plan every day and monitor risks as part of the global village we live in.
At Microinsurance we are focused on changing the way business insurance is developed and processed. We are insurance with AI delivered through API's. We are in the forefront of that change; developing policies by the season, job, by the hour, by the day and by the Km, thus fitting our model to that of the platforms and the way small and micro businesses see risk. We are unbundling business policies so that the cover offered fits with peoples and business needs or the actual job or process being undertaken. Making Business Insurance transactional.