Bushfire costs will grow, but will insurance be able to keep up?


Image Credit: CSIRO

This article was originally published on my LinkedIn profile.

I’ve seen plenty of coverage of the recent Climate Council report on the likely increase in bushfire losses. But in reality these growing costs could be far higher and even more unequally distributed.

The figures for economic losses are based primarily around insured losses (which in economic terms aren’t really a loss, assuming that the bushfire risk has been priced correctly), and this assumes that in the future most properties will still be insured against bushfire. But the larger conflagrations brought on by climate change as well as the closer coupling of disaster events (the longer fire seasons will make it more likely that multiple large bushfire disasters happen in any one year) will increase the costs for insurers and make it more likely that any one bushfire season could bankrupt them. In theory, the larger the loss in the worst case scenario, the higher premiums need to be in order for insurance companies to remain solvent. In practice, insurance companies push up premiums after large disaster events, even for different hazards. Together these mean that as climate change increases bushfire risk, in particular the risk of catastrophic outcomes, insurers will charge ever higher premiums and some may withdraw from the market entirely. This will lead to far fewer people being covered when a bushfire disaster strikes, with the government and charities being left to pick up the slack.

Perhaps it’s time then that the Federal Government revisited the idea of a national disaster insurance scheme – to ensure that future generations can meet the costs of these disasters.

Nepal Earthquake – How to Help from Afar

Almost two years to the day after I left Nepal it has been struck by the devastating earthquake that I and so many of my colleagues there had feared. I’m filled with much sorrow by the reports and images that are coming out of Kathmandu and remote mountain areas struck by the quake. Many highly skilled and committed individuals and organisations, such as the National Society for Earthquake Technology, have been working hard for many years to prepare the country and its people for this earthquake and I’m sure that their efforts have saved and will continue to save lives as this disaster unfolds. The international response is also scaling up and I sincerely hope that lessons of the 2010 Haiti earthquake and other disasters have been learned by the international community as it rushes to provide aid. I have seen many on social media wondering how they can help from afar so I have put together this short guide on how to donate, volunteer online and some things to think about if you’re considering going to Nepal.


For comprehensive updates on the earthquake and the response check out the following websites:


Many aid organisations have set up international and national appeals. For ease and to eliminate any international transaction fees search for appeals made by organisations in your own country. Search Nepal earthquake appeal in your web search engine. Here are some international options:

As some of the largest organisations present in Nepal who specifically work in disaster response AND have an international network so you can donate in your own country I recommend the Red Cross/Red Crescent, UNICEF, Oxfam and Plan International. It is also possible to donate directly to the United Nations Central Emergency Response Fund, which is distributed through UN agencies. Some news and government organisations have been compiling lists of appeals. Here are some that I have come across, let me know if you’re aware of others:

Please send cash and not goods. It’s really important that relief goods are targeted at the needs of the affected people and culturally appropriate. An added factor in this disaster is that Kathmandu Airport is a critical supply bottleneck – every piece of cargo space is absolutely precious and needs to contain only the most urgent needs. Save your old clothes and tins of corned beef and send cash instead.

Be careful who you donate to, especially small NGOs who you hear about through social media. Nepal has more than 30,000 non-government organisations and while many of them do excellent work many others are thinly veiled money-making scams. I would also recommend avoiding those religious NGOs who mix proselytising with aid delivery – which is unlikely to be appreciated in a predominantly Hindu and Buddhist nation. Do your homework before you donate to an organisation you haven’t heard of before. Check out their rating on a website like Charity Navigator or do some research on the Center for International Disaster Information website. Funding needs are not only immediate but will run into the months and years ahead as the shift from response to recovery and reconstruction happens. Hold a fund-raiser in the weeks or months ahead and donate the funds to one of the many appeals.

Volunteer Online

Digital humanitarian volunteering is growing in importance and beginning to be used more and more by humanitarian agencies on the ground in assessing needs and planning their response. Some organisations like the Standby Taskforce have a small cadre of more permanent volunteers (which you can join for future operations) but there are other efforts that almost anyone can contribute to:

MicroMappers – Classifying tweets and images

Humanitarian OpenStreetMap – Producing and updating digital maps

DigitalGlobe Tomnod – Identifying damage on satellite images

Follow Patrick Meier, who is very across digital humanitarianism, for updates on other opportunities.

Volunteer on Social Media

Sharing information on social media about where to donate, how to volunteer online and initiatives for locating missing people (such as Google Person Finder, ICRC’s Family Links and hotline phone numbers for foreign affairs departments and embassies) can help. Dispelling rumours, for example about aftershocks, is also very important particularly if you know people in the region. Unfortunately the disaster has brought many disturbed individuals out of the woodwork on social media who are posting disgustingly offensive things about the disaster that do not bear repeating. Don’t engage with these sick individuals. Downvote, report and block them instead.

Reconsider Unskilled Volunteering

I understand that many people want to rush in themselves to do what they can. However, for most this may not be a great idea. The majority of the international teams heading to Nepal are made up of specialist rescue workers, disaster medicine experts, logistics and resource management experts, specialists in disaster needs and recovery assessment etc. to bolster local experts and help get resources to Nepalese workers and volunteers on the ground. International rescue teams are required to be self-sufficient, which is very important given the shortages of basic supplies like food and water that are already occurring. The Nepalese Red Cross and other local NGOs have been working for years to train people in basic rescue, preparedness and first aid. With neighbours already helping neighbours there is no need for unskilled foreigners to take up precious supplies by coming to help. You can do much more good by donating the money you would spend on an airfare. One of the key lessons of the international response to the Haiti earthquake was the difficulty in coordinating the large number of small and inexperienced international NGOs and individuals who rushed to help – this actually hampered response efforts. It’s a similar story for further down the line once we get to recovery and re-construction efforts. If you don’t have specialist skills, your volunteering may end up taking away jobs that could be given to local people in the reconstruction. Despite the best of intentions, irresponsible volontourism can wind up not doing much good and even doing harm. Think critically about what it is you want to do before you go and check out the following resources to work out whether you’re doing the right thing.

Help the Economy Recover

If on the other hand your thinking of holidaying in Nepal – don’t necessarily change your plans. Tourism is a big part of Nepal’s economy and the industry and people’s livelihoods will be hit hard as tourists stay away in the wake of the earthquake. Once basic infrastructure has been repaired and flows of supplies have returned to normal, by all means make your holiday in Nepal and spend money in local shops, restaurants and other businesses and buy local products. This will help restore livelihoods and speed economic recovery.

Consider Skilled Volunteering

If you do have relevant skills, for example in engineering, volunteering in development can be an excellent way to help in the long term – especially if you’re aiming for fair trade learning. Check out organisations like Doctors Without Borders, Engineers Without Borders, EU Aid Volunteers, Australian Volunteers for International Development, VSOArchitects Without Borders or enquire with your national aid giving organisation about volunteer opportunities.

City of Sydney joins 100 Resilient Cities Campaign

Today the Rockefeller Foundation announced its latest group in the 100 Resilient Cities program. I was surprised to find Sydney as one of the cities who are now part of the program.

Except it’s not Sydney it’s the City of Sydney, one of the 40 or so local governments that make up the real Sydney metro area. Depending on how you want to measure resilience it’s probably one of the more resilient, if not the most resilient LGA in the Sydney Metro area. And with the possible exception of terrorism it would be on the lower side in terms of hazard profile too.

It contains 4% of the population and just 0.2% of the land area in the metropolitan region. It does however account for 28% of the Gross Regional Product, 25% of the jobs and 13% of the businesses of the Sydney metro area. However this economic contribution is heavily dependent on the rest of the metro area. Extreme interconnectedness is one of the things that reduces resilience and improved collaboration is one of the best ways to build it.

If City of Sydney is really serious about being a resilient city it will need to engage heavily with a much broader set of partners including the State Government and the other 40-odd local governments in the metro area. It will also need to ensure that the benefits it gains from being part of the Rockefeller collaboration are shared amongst these partners.

There is currently no city-wide emergency management or resilience forum in Sydney. Perhaps this grant will be the impetus that establishes one.

Highly fragmented local government is not unusual according to data from the OECD, with the average across 275 metro areas being 74 local governments (and that’s not even counting other levels or single purpose local governments). A number of other cities in the 100 resilient cities campaign have similar problems of fragmentation, and it’s not clear whether its something that’s even being considered.

It’s going to be interesting to see how the City of Sydney handles this issue moving forward with the program (and for that matter who gets the Chief Resilience Officer job). I’ll be staying tuned.


There are no Black Swans

One of the things that irritate me most about the Black Swan discussion is the number of people, workshops, media articles etc. that talk about trying to find them.*

A Black Swan is by definition something you did not expect to occur. It’s something you’re not prepared for (specifically), something that took you by surprise. Once you’ve forecast an event (or at least entertained its possibility) it ceases to be a Black Swan.

But are Black Swans really a complete surprise?

Someone, somewhere may have thought of the possibility of any event. When you think about it, all events are really Gray Swans or Gray Geese (I like the alliteration better). Indeed the events usually trotted out as Black Swans (9/11, the GFC, the Tohoku earthquake and Fukushima disaster) had been entertained as possibilities by smart people working in relevant fields. Indeed proposals had been made for various actions that would have prevented or substantially mitigated these disasters. But the decision makers, the people who really count, did nothing. They either weren’t told about the risk or chose to do nothing.

However, just because these events can be foreseen doesn’t mean we need to be expending enormous effort in searching for them.

One of the problems with the ‘hunting black swans’ mentality is that there are a near infinite number of possible events, of which only a much smaller subset will actually occur in a reasonable planning horizon. Trying to address every Gray Goose you can think of will quickly get you nowhere. What’s needed are actions that will enable organisations and communities to adapt to any event – this is what much of the resilience discussion is getting at.

Yet some of the risks we face are worth addressing on their own, either because they’re very likely or easy to mitigate – the ‘low hanging fruit’ of the risk management world. We shouldn’t ignore these in our quest for resilience, yet these ‘easy’ risks are sometimes forgotten about in the resilience discussion.

The risk landscape is not static either. Some risks that were Gray Geese may become easier to mitigate or likely enough that they warrant individual attention. Others may diminish in likelihood or become harder to mitigate individually and so are better off treated as part of broader resilience processes.

That might be harder than running workshops around finding black swans, but it will be much more useful.

*I’m sure it probably irritates N.N. Taleb even more.

Sex, Death and Hurricanes

By now you will have probably seen the reports about new research apparently showing that female named Atlantic Hurricanes are deadlier than male named storms because female names are ‘less scary’ than male names. The main investigation consisted of an analysis of 92 Hurricanes between 1950 and 2012 that made landfall in the USA (Katrina and Audrey, the two most deadly storms were excluded) examining fatalities, normalised damage, category, minimum pressure, gender of the storm name and year of occurrence.

There has been a fair amount of criticism on the paper from around the web including GRRLScientist in the Guardian, Future Tense in Slate, Not Exactly Rocket Science in National Geographic and on Mashable. The authors have responded to some of the criticism in these pieces.

The authors have also made their data and statistics from the model fit available for use.

The principal criticism has been on the approach to show that their finding is ‘significant’ which involves generalised linear regression on a negative binomial distribution and two-way interaction terms. Less fancy methods (simple correlation and a multi-linear regression) found no significant effect. B

Is there a difference in the number of people who die in Hurricanes based on the storm name’s gender?

You can’t just compare the average rates – Hurricane fatalities are a fat tail phenomenon, a small number of big storms contribute most of fatalities. Let’s forget modelling, regression algorithms and the fancier statistics. Let’s just look at the data. Below I’ve plotted the cumulative distributions of fatalities from male named storms and female named storms from the entire dataset.

HurricaneGraph1You can see that for the high frequency, low fatality events the distributions are basically the same but there appears to be some divergence at the more severe end with a higher fatality rate in female named storms. But the difference isn’t that much – and there’s the data issue, with storms between 1953 and 1979 only receiving female names there’s way more of them than male named storms. So visually there’s not a huge difference and we can quantify this using a statistical measure called the Two-sample Kolmogorov-Smirnov test. This test allows comparisons of two samples of data and helps you decide between one of two hypotheses:

H0 – They’re from the same distribution.

H1 – They’re from different distributions.

For these data the KS-test gives D = 0.1065, p-value = 0.976. This means that we can’t reject H0 – i.e. we can’t tell if the two samples are different or there’s no detectable difference in the underlying pattern of fatalities based on storm name gender.

We can also look at only the storms during the time in which both male and female names were used:

HurricaneGraph2Here we can see that what little difference we saw in the complete dataset disappears completely, further suggesting that the effect found by Jung et. al. is quite probably a statistical fluke. If you look at enough variables you’ll eventually find a statistically significant correlation. In fact if you look hard enough you can find all sorts of strange things that correlate with each other.

To explain the effect, the authors turn to additional experiments where they measured a difference based on storm name gender in perceived threat and willingness to evacuate. Implicit sexism plays a big, big role in our society. (I highly recommend Cordelia Fine’s book, Delusions of Gender, which goes into the detail very well) but it’s hardly the only thing at play – many factors cause people to (usually) downplay threats from and delay responses to Hurricanes and other disasters.

The scenarios presented (you can see examples here) were not anything like real Hurricane warnings and media broadcasts, which tend to be much more alarming and action oriented, especially for more severe Hurricanes which is where the authors claim there is an effect. A better experiment would be to mock up a TV news broadcast of Hurricane Alexander/Alexandria and show it to people in hurricane prone areas and see what the results are. I would be very surprised if there was still a detectable storm name effect once a heavy dose of reality is injected.

As for policy recommendations I think its definitely too soon to consider changing the naming system, but whilst we’re talking about communication the NHC could really overhaul it’s woeful public advisory messages.

Alternatively there’s always this idea:

Australian Federal Budget: Bad News for Disasters

Well the Abbot Government’s first budget and it ain’t pretty. Here’s a roundup of all the new measures and cuts related to disasters. Although there’s a few new measures (such as the back-to-the-future National Bushfire Mitigation Programme) most of the ‘new’ spending are really the continuation of programs from previous governments.

New and continued spending

  • Stronger biosecurity and quarantine arrangements – $20 million over 4 years
  • Up to $320 million in assistance for drought affected farmers. However most of this is in the form of concessional loans or is contingent on state co-payments. Much of this spending is largely consistent with that of previous governments.
  • National Bushfire Mitigation Programme – $15 million over 3 years
  • Expanding research at the Australian Institute of Tropical Health and Medicine – $42 million over 4 years, though it’s unclear whether this will be offset by cuts elsewhere in the Australian Research Council’s budget.
  • $9 million over three years for the continuation of the National Climate Change Adaptation Research Facility (though this is a drop in the amount of funding compared to previous governments).
  • Addressing insurance costs in North Queensland. $12.5 million in grants to bodies corporate to undertake engineering assessments of strata properties to understand natural disaster risks and identify mitigation measures. This initiative will also establish an insurance comparison website for home building and contents and strata insurance for North Queensland.
  • Continue the Natural Disaster Resilience Program and the National Partnership on pest and disease preparedness and response programmes (although with reduced funding)


  • Closure of the Australian Emergency Management Institute. Some of its programs will be transitioned to a ‘virtual’ institute.
  • Cuts of $7.6 billion to foreign aid over 5 years
  • Cut the Exotic Disease Preparedness Program
  • Merger of a number of biosecurity committees and working groups
  • Cuts of $10 million over 4 years to the Bureau of Meteorology
  • Cuts of $21.7 million over 4 years by merging the National Environmental Research Programme and the Australian Climate Change Science Programme
  • Cease the National Insurance Affordability Initiative which had a number of activities related to flood risk management at a saving of $72.2 million

I’ve sourced these all from the budget papers. Let me know in the comments if I’ve missed anything.


My Post on the EM Knowledge Hub Blog

My Post on the EM Knowledge Hub Blog

I’ve written a post for the EM Knowledge Hub Blog on Disaster Risk Financing for governments. Check it out.