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Looking ahead: John McAneney

path and the losses it may inflict is now normal practice. “Missing from the traditional risk assessment approach had been the geospatial understanding of likely hurricane paths in relation to where assets were located and knowledge of structural weaknesses of different kinds of buildings,” Professor McAneney says. “Today, catastrophe loss models attempt to encompass all these attributes, and we have gone from a situation where few companies used models to a point where many use more than one model. “Some argue that models are being used wrongly, with too much credence given to the exact numbers produced for, say, the one-in-200-year event loss, and there needs to be a much better appreciation of why models differ and the perils that each cover. “However, this is a much better situation than existed 25 years ago, when several insurers went bust after Andrew.” The societal impact of Risk Frontiers’ work cannot be overestimated. Its research has been used by insurers to assess natural hazards and determine the premiums Australians pay to insure their homes and other assets.

“As we look further ahead, you don’t have to be clairvoyant to see the increasing insurance and economic risk profile in southeast Asia.” Moreover, as the importance of resilience has become central to thinking, Risk Frontiers has strengthened its services to government to assist in building more resilient communities, including a commitment to risk communication. Funded by the insurance sector when it was launched in 1994, Risk Frontiers has played a leading role in supporting the country’s natural disaster mitigation efforts. One of its crowning achievements is its contribution, together with Willis Re, to the creation of the National Flood Information and Flood Exclusion Zone Databases for the Insurance Council of Australia and its members. The two databases provide flood information for almost 92% of Australia’s addresses, to help insurers determine the risk. “When we started, almost no company offered flood insurance,” Professor McAneney says. “There was little research on likely losses. “Very often, the work was heavily focused on the hazard. In trying to take it to the next step and say, these are the risks and how to price them – that was truly pioneering.” insuranceNEWS

August/September 2017

Risk Frontiers does not expect its ties with the insurance sector to weaken now it is more commercially driven. “The insurance and reinsurance sectors will continue to be key to our future business success and the key collegial relationships developed with the major companies in Australia and abroad, which have so generously supported our development, will be fostered,” Professor McAneney says. “We wouldn’t be where we are today without that support.” Risk Frontiers also wants to use its Australian success as a springboard to the wider Asia-Pacific region, which is often rocked by earthquakes, typhoons, landslides and other calamities. “As we look further ahead, you don’t have to be clairvoyant to see the increasing insurance and economic risk profile in southeast Asia, where many of the world’s largest cities are located in hazard-prone areas,” Professor McAneney says. “It makes sense that we engage more fully with an exciting part of the world. We want to play our part in helping make these * communities more resilient.” 27

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