My favorite anecdote from last week's ClimateTech Connect was a little gem of high tech meeting low tech: a sophisticated network of sensors and a woman with a rake that, together, are protecting hundreds of homes from flooding.
A panelist at the conference on mitigating the risks from climate change said flash flooding had washed away some 300 homes in a small town in the U.K. As the insurance industry helped it rebuild, the town took advantage of improvements in technology and installed sensors that monitor upstream water levels. When they reach potentially dangerous levels, an alarm sounds in the mayor's office. A clerk then grabs her rake and walks down the street, where she clears the debris that collects in a culvert, ensuring that any flood waters will quickly run off.
Few problems have such simple, happy solutions, of course, but the conference still offered some hopeful signs in a world seemingly buried under warnings of impending doom. The mere fact that hundreds of senior people from a whole variety of vantage points — big banks, home builders, municipalities, etc., as well as insurance companies — spent two days in Washington, D.C., strikes me as a good sign.
I'll share a few highlights, in the hope they provide food for thought.
A former fire chief said my second-favorite thing at the conference. I almost hesitate to share, because, in retrospect, what he said is obvious. But it had never occurred to me, and, in my defense, I hadn't heard anyone else say it despite having spent years wrestling with how to get people to understand that everyone in a community is in the fight together when it comes to wildfire risk.
I knew that reducing the risk to my house reduced the risk to yours, and vice versa, but I didn't think strategically enough — and the former fire fighter helped me out. He said it doesn't help a community much to have a scattershot approach to hardening homes against fire. He said communities have to be systematic. That means focusing on the homes at the edge of the community closest to the wildlands that might catch fire, while worrying far less about the homes that are well inside the boundary.
That sort of approach not only makes sense but seems more manageable. It reduces the amount of money that is needed to protect a community and takes some of the onus off individual homeowners to alter their landscaping, put mesh over vents to keep embers from getting into a home, etc. A homeowners association could undertake the hardening work on the key homes on behalf of the whole community.
Or a community could follow the lead of Amy Berry, CEO of the nonprofit Tahoe Fund. She has raised $30 million of private capital to leverage $200 million of public funds for more than 220 projects, including five in the Tahoe area that take the sort of approach advocated by the ex-fire chief. The fund uses public resources to identify homes that could be "superspreaders," then knocks on their doors and offers to help harden their homes. (These projects are near and dear to my heart, given that I used to live just down the road from three of these projects. When I mentioned the name of the town that had our favorite pizza place, she said its name instantly.)
More broadly, the conference embodied the sort of broad conversation, reaching well beyond the insurance industry, that needs to happen. Francis Bouchard, a managing director at Marsh, has hit that theme hard at ITL, including in an interview I did with him last fall and in a webinar I conducted with him and Nancy Watkins, a principal at Milliman, in December. At ClimateTech Connect, Francis continued the theme with a fireside chat with Illya Azaroff, president of the American Institute of Architects. He represents 110,000 architects and described all he's doing to try to get them to design for resilience from the get-go. JP Morgan, which has announced a massive financing initiative related to climate change, was represented by Sarah Kapnick, its global head of climate advisory. The climate chief for Massachusetts was there, too.
So, there was a broad array of important, interested parties even before you got to the insurance ecosystem, well represented by Nationwide, Travelers, Munich Re, etc., including a host of intriguing technology startups. There were lots of foreign accents, too, which suggests that we're getting the sort of cross-fertilization of ideas that really hard problems require.
The only real disappointment was that the federal government didn't show, other than to describe what data sets might be available and useful, but that lack of presence was hardly a surprise, given the current administration's stance on climate change and promotion of fossil fuels.
Denise Garth, chief strategy officer at Majesco, told a story that epitomized for me just how hard we're going to have to keep pushing. A storm with huge hail hit her home in Omaha, doing $140,000 of damage, including requiring a new roof. Her insurer, a top-five carrier, promptly cut her a check, but its agent missed an opportunity of the sort we just can't miss if we're going to make the world more resilient.
It was only when Denise started dealing with a roofing contractor that she learned that rubber roofs were available that looked like tile, shake or whatever she wanted. In the future, hail would just bounce off. She had a rubber roof installed and actually got a 20% discount from her carrier as a result. But somebody — actually, lots of somebodies — needs to do a much better job of educating agents and encouraging them to counsel customers.
After attending last week's conference, I'm encouraged about the progress we're making on resilience, but we have a long way to go.
Cheers,
Paul