Climate perils can be "engineered out"
Thompson said, with the help of his firm’s engineers, commercial property owners can take concrete steps.
“With our engineers, we really do think there are things that can be done, whether it’s smart site selection or whether it’s really understanding what those impacts are going to be on the facilities,” he said.
Read more: FM Global launches new products to mitigate climate risks
FM Global recently launched two new climate tools aimed at helping organisations mitigate the risks of climate change. The FM Global Climate Risk Report and the FM Global Climate Reporting Aid are available to the company’s clients.
“The climate risk report takes a combination of things to help our client base understand their climate-related risks,” said Thompson. “First, is it takes a layer of our hazard maps.”
He said the intelligence from these maps can be combined with on-site visits by FM Global’s engineers.
“Layering both the hazard maps, as well as engineers putting boots on the ground and going into facilities, gives us a really good representation of what the risks are at each of our clients’ facilities,” said Thompson.
The Reporting Aid, he said, is designed to help clients complete their financial reporting according to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
“What that [Climate Reporting Aid] does is it provides a synopsis of the TCFD reporting and it talks about the actual physical risks that our clients might be exposed to, as well as how to take a risk report and translate into TCFD reporting requirements,” he said.
The TCFD develops recommendations on the types of information that companies should disclose to support investors, lenders, and insurance underwriters in appropriately assessing and pricing risks related to climate change.
“Pretty much every CFO that we’re talking to these days is asking: ‘How can we inform this through reporting?’” said Thompson.
He also detailed the physical defence mechanisms that his firm has developed and tested for their use against floods.
“We’ve been doing a lot of testing of flood barriers and flood gates that can be put into doorways,” said Thompson.
A common image during any flood is local residents, volunteers, and the SES struggling to fill and move hundreds of sandbags into place.
“That takes a lot of time, it’s really hard work, and it’s not always effective,” said Thompson. “These barriers, which our labs have tested and verified that they work, are aluminium gates with rubber seals that slot into a doorway in a predesigned channel and you screw them down,” he said.
Thompson said these flood barriers can be put in place in 20 minutes. He said another FM Global flood barrier is long rubber tubes, one and a half metres high, that can be filled with water. The firm recently offered its clients a resilience credit to help pay for these sorts of risk prevention steps.
“We’re returning $300 million of money to our policyholders in the form of a credit that is designed for them to invest in exactly what I’ve been talking about, whether it be flood barriers or actions to reduce bushfire exposure,” said Thompson.
He said this amounts to 5% of a renewal premium and can help turn recommendations into tangible actions.
“Our engineers are working with our clients to give them some ideas on where they might be able to spend that money, using things like the Climate Risk Report,”
Read next: ICA welcomes federal budget’s extreme weather measures
With Australia facing extreme weather events more often, the Insurance Council of Australia (ICA) welcomed the federal government’s weather resilience measures in the federal budget.
The ICA said the federal government’s revised 2022-23 budget, delivered by Treasurer Jim Chalmers, has laid the foundations for a “significant and bold new start” to governments’ approach to improving community and household resilience to worsening extreme weather.
“The Insurance Council welcomes the federal government’s budget announcement, which is a historic shift in the right direction to better protect homes and communities from the impacts of extreme weather,” said ICA CEO Andrew Hall.
