1. Building resilience to property risks arising from extreme weather 11 July 2013 Caroline Woolley Marsh Martin Townsend BRE Global David Wilkes ARUP

2. MARSH 1 14 September 2015 Building resilience to property risks arising from extreme weather Agenda Panel presentations and discussion: –Caroline Woolley – Risk and Property Practice Leader, Marsh. –Martin Townsend – Director BREEAM, BRE Global. –David Wilkes – Associate Director, ARUP.

3. MARSH 2 14 September 2015 Building resilience to property risks arising from extreme weather Introduction Natural catastrophe (NAT CAT) risk and the tools to tackle it: –NAT CAT landscape. –Narrow the gap between total and insured losses. –NAT CAT risk management best practice. Making cities resilient. Property sustainability.

4. MARSH 3 14 September 2015 Natural catastrophes Increased frequency and severity

5. MARSH 4 14 September 2015 Natural catastrophes Significant insured losses – 2011 to Q4 2012

6. MARSH 5 14 September 2015 Natural catastrophes Narrow the gap Insured versus uninsured losses (source: Munich Re, 2013): –Katrina (2005) – Insured loss USD62.2 billion. Total loss USD125 billion. –Japan (2011) – Insured loss USD40 billion. Total loss USD210 billion. –Thailand (2011) – Insured loss USD16 billion. Total loss USD43 billion. –Sandy (2012) – Insured loss USD30 billion. Total loss USD65 billion. –In US, 64% of total losses are insured. –In Europe, only 16% of total losses are insured. Reasons include: –Exclusions (Japan). –No insurance. –Unavailable insurance. –Restricted insurance. –No reinsurance. –Underinsurance. –Emerging risks. –Claims disputes.

7. MARSH 6 14 September 2015 NAT CAT risk management NAT CAT Pack Our view of best practice in relation to natural catastrophe risk management and transfer. Approach: Risk identification. Risk measurement. Risk improvements. Risk treatment. Full spectrum from data collection, to business continuity management, through to claims. Includes property sustainability and resilience.

8. MARSH 7 14 September 2015 NAT CAT risk management Spectrum NAT CAT Risk Map. Natural hazards and catastrophe modelling. Supply chain risk management. Business continuity management. Business interruption insurance reviews. Updates – Guy Carpenter CAT Central.Guy Carpenter CAT Central Placement, including Bowring Marsh: Global Property. Insurance claims preparation. Property sustainability – green buildings. UNISDR.

9. MARSH 8 14 September 2015 Natural catastrophes NAT CAT approach Modelling process own locations: NAT CAT Risk Map Package – Complete overview to identify exposures. NAT CAT zoning for all locations, using CS Stars technology and the NATHAN 1 database. Vulnerability – The extent of damage to property at a given event intensity. How robust are your assets? NAT CAT modelling – Modelling of specific locations using AIR/RMS 2 – likelihood of events to establish loss estimates and limits. Risk financing – What proportion of the loss is retained by the company and what proportion is (or should be) insured? Supply chain: –NAT CAT Risk Map Package – Review of risk for key suppliers’ NAT CAT zoning information. 1 NATHAN: Natural Hazards Assessment Network 2 AIR/RMS: AIR Worldwide/Risk Management Solutions

10. MARSH 9 14 September 2015 Making cities resilient How you could help City member ­Becoming resilient. ­Contributions to community. ­Business Emergency Response Group (BERG) – part of Business in the Community (BITC), a Prince’s Trust charity. ­Partner of the UNISDR, supporting the “Making Cities Resilient” campaign. City adviser ­Risk management. ­Insurance expertise.

11. MARSH 10 14 September 2015 Property sustainability Main categories: –New build. –Retrofit. –Rebuild after a loss. Importance of insurance funds in recovery after a NAT CAT event. Rebuild in an environmentally friendly and robust way, and insurers pay. Green building and resilient repairs clauses.

12. This PowerPoint™ presentation is based on sources we believe reliable and should be understood to be general risk management and insurance information only. Registered in England Number: 1507274, Registered Office: 1 Tower Place West, Tower Place, London EC3R 5BU In the United Kingdom, Marsh Ltd is authorised and regulated by the Financial Conduct Authority for insurance mediation activities only. Marsh Ltd conducts its general insurance activities on terms that are set out in the document "Our Business Principles and Practices". This may be viewed on our website http://www.marsh.co.uk/aboutMarsh/principles.html © Copyright 2013 Marsh Ltd All rights reserved GRAPHICS NO: 12-0205

13. David Wilkes - Arup “Building” Resilience into Infrastructure Risks Arising from Extreme Weather

14. 13 David Wilkes – Former manager – Resistant Infrastructure

15. 14 People and Propert

16. 15 Definitions Resistance Designing to exclude, or protect against design hazards so that normal operation can continue Resilience Designing, or adapting so permanent damage is avoided, structural integrity maintained, normality resumed as quickly as possible

17. 16 UK CPNI, UK Govt. those essential facilities systems, sites and networks…upon which daily life depends. The sectors that are considered to deliver ‘essential’ services are: Food Water Government Finance Health Emergency Services Transport Communications Energy Building Resilience into Infrastructure

18. 17 Building Resilience into Infrastructure Food

19. 18 Building Resilience into Infrastructure Water

20. 19 Building Resilience into Infrastructure Government

21. 20 Building Resilience into Infrastructure Finance

22. 21 Building Resilience into Infrastructure Health

23. 22 Building Resilience into Infrastructure Emergency services

24. 23 Building Resilience into Infrastructure Transport

25. 24 Building Resilience into Infrastructure Communications

26. 25 Other Urban Resilience Definitions

27. 26

28. 27 Natural Disasters

29. 28

30. 29 Hunters Point New York - Resilience

31. 30 NYS2100 – Post Sandy Building retrofit

32. 31 Thank - You Any Questions? david.wilkes@arup.com Thank you for listening

33. MARSH 32 14 September 2015 NAT CAT Risk Map Latest addition to the NAT CAT Pack. Collaboration with CS Stars using Risk Goggles. First step – overview of all exposures. This is an interactive map of clients complete portfolio of assets, including suppliers’ locations where appropriate. From a single view you can see all you property risk data, and now this includes NAT CAT hazard exposures.

34. MARSH 33 14 September 2015 Supply chain risk management Damage and non damage. Traditional property damage/business interruption (PD/BI) policies: –Extension clauses. –Damage only. –First tier only. –Restrictions. Supply chain cover: –Non-damage BI/supply chain policy development. –Zurich, AIG, Munich Re and Allianz. –Supply chain assessments. –Captive approach.