Making good decisions in the context of uncertain and changing risks really depends upon a capability of having to put whatever the latest extreme event is into a much longer term context. That’s not easy to do. Roger Pielke Jr., University of Colorado
We have learned much about assessing and managing catastrophe risks in recent years, but there is still a great deal of uncertainty. Even in countries with an excellent track record of mitigating risk, major earthquakes revealed significant gaps in knowledge. The death of a major terrorist leader does not mean that we can drop our guard; the changing nature and tactics of widely disbursed terrorist groups means that we are more likely to see a greater frequency of small, successful attacks on business interests in the U.S.
A key lesson for companies is that they should know their insurance company well before a catastrophe strikes. Know what resources the company has available to respond to a catastrophe, especially in the event of widespread damage or multiple events. And just as it’s important to take a long-term perspective in evaluating catastrophe risks, there is also great value in establishing a long-term relationship with a particular carrier.
Companies facing catastrophe risks must make decisions amid great uncertainty, using the best information available.
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