As the global cost of nat cat incidents rise to about $340bn, businesses would do well to create a robust plan. Allied World outline an essential action plan for typhoon preparedness – one of the most severe nat cat risks
Asia-Pacific is a region most prone to natural catastrophes and evidence suggests that the frequency, severity and cost implications of such disasters are increasing.
Between 2014 and 2017, the region was hit with 55 earthquakes, 217 storms or cyclones and 236 cases of severe flooding. It is also at risk of landslides, tropical storms, tsunamis and volcano eruptions. These catastrophes have affected more than 650 million people, causing a death toll of more than 30,000.
At the same time, the global cost of nat cats has risen sharply, from $47bn in 2009 to $340bn in 2017, according to the World Economic Forum (WEF).
The construction risks
For businesses, the risks are exacerbated by the concentration of commercial, logistics, manufacturing and construction hubs in countries such as the Philippines, Thailand, India and Bangladesh. The high density of critical supply chains in these countries mean that the consequences of nat cat interruption will be extreme.
Asia-Pacific has invested heavily in new infrastructure and construction projects – from new railways, offices, residential builds and mega cities. In fact, some infrastructure investment across ASEAN (the Association of South East Asian Nations) outstripped GDP growth during the last decade and future infrastructure investment are estimated to be in excess of US$2,759bn, according to a 2017 report by Asia Development Bank.
Indeed, future infrastructure projects can learn a lot from past nat cat incidents that have destroyed large infrastructure. For instance, earthquakes in Palu, Indonesia in 2017, devastated hotels, shopping malls and countless houses with six-metre-high tsunami waves hitting the beach fronts shortly afterwards. The Palu earthquake is just one of many examples of the damage to infrastructure and reinforces the importance of preparedness (see box).
Some of the most devastating natural disasters in the region are cyclones. There are typically between 10 and 13 tropical cyclones in Australia each year, with another seven to nine in the Pacific region. Fiji alone has 3.4 cyclones that reach category three or above in any given year.
While typhoons and cyclones can hit at any time of year, the season in Asia generally occurs from June to November with a peak between August and October. For businesses in the region, it is critical to be cyclone-ready in order to minimise business interruption and loss.
“When these storms hit, they can lead to other devastating natural catastrophes that damage property and infrastructure,” says Paul Houston, vice-president, head of risk management, global markets at Allied World.
“As typhoons/cyclones can’t be prevented, it’s important to be proactive and not wait until the last minute. Being underprepared can lead to significant damage, while taking simple actions in advance can help minimise this.”
How to get typhoon-prepared
When a typhoon hits, businesses will have to contend with high winds, lots of rain, big waves, floods and landslides. Much of the property damage experienced is usually as a result of water and flying objects rather than the wind force itself.
Good preparedness can be split into three broad sections – actions to take before the season starts, tasks to be carried out in the first 36 hours before a storm hits and clear and defined processes for the aftermath.
Houston explains: “First you should assemble a typhoon preparedness team (TPT) made up of senior individuals and led by a project manager. Each member of the team should be allocated very specific tasks to perform, have the authority to implement these tasks and help precure all the necessary materials to minimise the damage.”
He adds: “At 36 to 24 hours before an event, you should be aware if a typhoon is likely. Each member of the team should head to a predetermined ‘control centre’, activate the typhoon plan and document, photograph and video the building to support any insurance claims.
“After the cyclone, the team should work together to repair, de-water and reconnect.”
Checklist for typhoon preparedness
Before the cyclone season
- assemble a typhoon preparedness team
- allocate an individual to monitor typhoon direction and speed, and alert the team when one is approaching
- allocate an individual to adequately stock equipment before each season including sandbags, strapping, ropes, anchors, tarpaulins, diesel generators and water pumps
- allocate an individual to identify flood-prone areas such as basements and come up with a water evacuation strategy
36 – 24 hours before a typhoon hits
- hold an emergency meeting of the TPT to check the plan
- lash down moveable objects, clear drains and gutters, disconnect non-essential power, gas and water
- check all vulnerable areas, repair and secure roof flashing, check building condition
- protect vulnerable equipment with waterproof coverings
- board up windows and doors
- elevate goods and equipment in vulnerable areas such as floors and basements
- cap pipe ends to prevent water egress
- refill diesel generators and charge communications equipment
- photograph, video and document building condition before the typhoon hits to help with insurance claims
After the cyclone
- check building carefully as structure may be weakened.
- commence clearing operation
- use pumps to immediately remove water from building or foundations
- use specialist contractors to check all utilities for damage and / or leaks before reconnecting
- photograph and video the site post typhoon to support insurance claims
- check fire protection systems
- re-clear drains, gutters and storm drains
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