Picture of boats floating on the Chao Praya river, Thailand

Dealing with the extreme: Martyn Parker, new Chairman Global Partnerships discusses Thai floods at WEF East Asia

Less than six months ago, parts of the Bangkok venue for the 2012 World Economic Forum East Asia summit were under water, struck by the massive floods that took many, including the insurance industry, by surprise. Thailand had experienced its worst flooding in 50 years affecting most parts of the country, resulting in an insurance payout of USD 12 billion dollars.

Today, you hardly see a trace of the disaster, although sandbags remain in some of the streets lining the Chao Phraya river. Martyn Parker, new Chairman Global Partnerships Swiss Re, and former Head of Reinsurance Asia, commended the Thai government’s swift reaction to the disaster, and the steps taken to ensure better protection for the future. Measures include the establishment of a USD 1.6 billion insurance pool to support households, industries and small and medium-sized enterprises; the government is also planning to construct more effective water management systems.

"Once the waters have subsided it’s easy to forget. But you never know when Mother Nature will strike again," Parker said, "or how hard. The more you can prepare yourself before a disaster strikes, the better you can avoid the worst case scenarios, and the quicker you can recover. In the countries we have studied, between 40 and 70% of expected disaster losses can be cost-effectively averted."

"In the countries we have studied, between 40 and 70% of expected disaster losses can be cost-effectively averted if you put in the fundamental preparations beforehand."

Swiss Re Chairman Global
Partnerships Martyn Parker

The consequences of the floods in Thailand were dire - not just in terms of lives and livelihoods. The country’s reputation in terms of attracting foreign companies, investment and tourism also took a hit. "Disruptions to manufacturing supply chains affected regional automobile production, and caused a global shortage of hard disk drives which is expected to last throughout 2012. Looking at supply chains, it shows that the complexity and interdependencies in the global supply chain is making it harder to isolate such type of risk," continued Parker.

Effective disaster risk management was therefore very much top of mind in during this regional Asian WEF summit, with five Heads of State attending. Parker received many questions about the insurance industry’s reaction to the heavy natural catastrophe losses in the past year, which accounted for 42.5% globally.

"We’re in for the long haul, he said."Risk is our business, and Swiss Re has been providing advice and solutions to governments for decades. We have diligently collected data and analyzed countless disasters over the years, with a view to improving preparedness in order to take some of the burden off the shoulders of governments and individuals. In fact we are already converting the experiences from last year’s floods in Asia into enhanced flood maps intended to help Thailand and other countries across the globe to plan their infrastructure projects and adaptation measures more effectively.”

Martyn Parker is British, and has worked in insurance for most of his life. He describes himself as a career reinsurer, and has spent several years working in Asia and Africa. He recently took over the role of Chairman Global Partnerships from Group Chief Executive Officer Michel Liès.

Published 6 June 2012

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