‘Disaster and Emergency Relief Framework’ IRDA, NDMA & FICCI Seminar A Presentation Man-made Disasters versus Act of Godby Mr. Yogesh Lohiya CMD, GIC Re 11 th August 2010, New Delhi

Section I Act of God? -A Global Perspective 2

Disasters Natural Vs Man-made Man-made (generally localized) Industrial accidents. Natural (Act of God) (area of spread is vast) Earthquakes/ Tsunami/ Cyclones. High Volume of losses in both cases. Mitigation (long term process) & relief measures (immediate) cannot be largely different. Preventive measures are not a general trend and largely ignored by the society. 3

People do not voluntarily adopt simple and cost effective loss prevention measures Underestimate the likelihood of a disaster more so happening to them. Myopic behavior impedes the process of loss prevention. Faith in the government to take steps to prevent & protect from disasters. 4 Disasters Natural Vs Man-made

Catastrophes : Some Facts There are twice as many people on Earth today as there were in A greater concentration of values than in –4 times more globally –6 times more in third world countries Most of the growth concentrated in coastal areas –More prone to weather risks (cyclones) 5

Catastrophes: Some Facts Catastrophes are more frequent now –3 fold increase in numbers as in 1950 Catastrophes are more severe in intensity –8 fold increase in severity as in 1950 Increase in insured losses- 15 X. 6

Catastrophes in 2009 Total Catastrophes: 288 –Natural Catastrophes: 133 –Man made Catastrophes:155 Loss of lives: 15,000 –Natural Catastrophes: 9,000 –Man made Catastrophes: 6,000 7

Number of Cat Events Swiss Re, sigma No 1/2010

Nat Cats in 2009 Hydrological disasters (floods) remained the most common disasters in 2009, accounting for 53.7 percent. Followed by storms (hurricanes) accounting for 25.4 percent. Geophysical disasters (earthquakes, volcanoes) accounted for 2.7 percent. 9

Nat Cat : Number of Victims 10

Catastrophes in 2009 Economic damages: US $ 62 billion –Natural Catastrophes: US $ 41 billion –Man made Catastrophes: US $ 21 billion Cost of Man-made disasters (insured losses): US $ 4 billion 11

Insured Cat Losses

Section II Exposure to Natural Catastrophes in India 13

INDIA – Vulnerability To Natural Catastrophes 14 Indian sub-continent considered one of the most hazard-prone countries in the worldIndian sub-continent considered one of the most hazard-prone countries in the world 85% of land area vulnerable to various types of Natural Catastrophes85% of land area vulnerable to various types of Natural Catastrophes

15 EARTHQUAKES EARTHQUAKES Seismically active 59% of prone to EQs Four EQs above 8 & ten above 7.5 on Richter Scale in the last 100 years. Seven in the last 2 decades Dense Population & Old Construction adds to the problem.

16 CYCLONES 8041 km long coastline Large Coastline; large population; large destruction. Tropical Cyclones generally strike Eastern coast Western Coast too is struck Thunderstorms (Nor’westers) common in NE, NW, Central & SW India Cyclone associated strong winds & rains compound the destruction. Floods & Coastal Inundations too are a risk. 15 cyclones have struck the Indian coast in last 100 years.

17 FLOODS India is the 2 nd most flood affected country after Bangladesh 40 mln hectares land mass prone to floods; 8 mln hectares affected annually. Rising population; developmental activities in flood plains make it more disastrous. Climate change also makes weather volatile leading to disasters. Avg. Annual Loss: US$ 400Mln. Urban Floods & Inundations are a new phenomena now. Mumbai Floods (2005)

Section III Are Natural Catastrophes Act of God? 18

Cat Events in India “Disastrous Weather Event” in Leh on IOC Jaipur Fire 2009 Mahul Oil Installations in Mumbai Surat Floods 2005 Mumbai Floods 2005 Plague/H1N1 Flu/ Bird Flu- 1994/ 2009 &

Catastrophic Events- Impact on India Loss of Life & Property on a large scale Majority of the affected uninsured Direct Losses due to natural disasters amount to (average per annum)- –2% of India’s Gross Domestic Product –12% of Federal Government’s Revenues All alleviation/ mitigation efforts post- event Disruption of Trade & Commerce 20

Catastrophic Events- Impact on India Some of the worst CAT losses have occurred in India Top in natural-disaster-caused mortality in 2009: 1806 victims in India Low values & Low penetration are the causes Catastrophe Risk Mapping is not complete Detailed data is not available Geographical Position makes us vulnerable to events occurring in neighbouring areas. –(Tsunami/ Earthquakes) 21

T h a n k Y o u 22