It's only natural that people tend to think of property damage as the main challenge when it
comes to natural disasters. But it is important to note that the impact goes far beyond that. It
also has the potential to disrupt supply chains, company operations, the workforce and more.
Technology to the Rescue
Today's environment is complex. It's fast-moving. And it's changing at an unprecedented rate.
Businesses, organizations, and government agencies are finding it increasingly difficult to use
traditional risk management models to keep pace with these changes. A deluge of data --
both structured and unstructured -- is forcing companies to adopt newer technologies to
assimilate, analyze and leverage that data for better decision-making and risk assessment.
Welcome to Industry 4.0 - or better known as the Fourth Industrial Revolution.
It was the development of the steam engine in the 18th century that heralded the transition of
society from an agrarian to an industrial, manufacturing-based one. This first "Industrial
Revolution" gave way to the Technological Revolution in the late 19th/early 20th century -- a
period where scientific discovery, standardization, and mass production dramatically
transformed the manufacturing process. This was followed by the Third Revolution -- the
Digital Revolution -- that started in the 1950's and witnessed the growth of electronics and
computers and the sharing of information across the globe.
The Insurance Information Institute (iii) collects information on catastrophes around the
globe. In its most recent report, it stated:
Overall losses from world-wide natural catastrophes in 2020 totaled $210 billion
dollars, significantly higher than $166 billion in 2019 (according to Munich Re).
There were 980 events that caused losses in 2020, compared with 860 events in
2019.
Insured losses from the 2020 events totaled $82 billion, also significantly higher
than $57 billion in 2019.
Natural catastrophes in 2020 caused 8,200 deaths, compared with 9,435 in 2019.
THE NEW RISK MANAGEMENT | 7
