Ten years ago this week, I, like many Americans, was stunned by the news coverage of Hurricane Katrina's devastation. The toll on the citizens of New Orleans and other Gulf Coast communities across more than 90,000 square miles affected by the storm was sobering.
In contrast, when I look at New Orleans today, I see a city in recovery, illustrated by milestones in economic development, community engagement and government reforms aimed at rebuilding stronger and better than before.
The 10-year anniversary of Katrina is our opportunity to celebrate those who have chosen to rebuild to a greater, resilient standard, knowing that the next storm is not a matter of if, but when.
Read More How we rebuilt New Orleans
As the world has seen an increase in size and frequency of catastrophic events in the past several years, we should not overlook the potential financial effects of disaster aid on our nation. The price tag for Katrina is estimated at $127 billion. Both social and private safety nets were stressed, bringing to light a very real and urgent need for public-private collaboration to assure our communities have the means to prepare for, and recover quickly from disasters.
Under a directive within his administration's climate-action plan, President Barack Obama has launched an initiative to bring together the expertise and resources of the federal government and the private insurance industry to reduce risks and costs of extreme weather events like Hurricane Kartina.
Policy makers at every level need to turn this initiative into opportunities for their own communities to build a more resilient future. The considerations over how best to protect a community can be complex, involving many stakeholders with very different priorities.
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Insurers can play a key role in this process by helping people quantify the risks they face. The fundamental functions of insurance – underwriting, risk engineering, claims management, and asset management – are some of the greatest economic tools we have to encourage individuals, businesses and communities to understand, prepare for and mitigate risks.
For its part, government must play an integral role in sourcing data, implementing a decision process and enforcing standards. Building a system capable of compensating for dynamic variables at the community level across the country in a meaningful way will not be easy. It will require political will, public support, funding and time.
Large-scale disasters vividly demonstrate the need to invest in risk-reduction measures before events happen but it can be difficult for communities to plan and take proactive, preventative actions. Public-private partnerships can be a catalyst for high-value investments over the long term. The Greater New Orleans Urban Water Plan presents a new vision for the Crescent City to develop sustainable strategies – including public and private investment – for managing water resources over the 50 year time horizon of the plan. It is estimated that implementation of the plan would spur up to $11 billion in economic impact, supporting roughly 100,000 direct and indirect, full and part-time jobs. Full implementation of the plan would result in a roughly $8 billion reduction in flood damages, eliminating flooding from category 2-3 storms and substantially reduce the damage and effects of a category 5 storm.
For Zurich, enhancing resilience requires taking a comprehensive approach because communities are dynamic, interconnected systems. The complimentary sources and quality of capital – physical, financial, human, social, and natural – are the lynchpin in the ability to withstand shocks, contain losses and recover in a timely manner. This framework provides a system that can be measured, and compared within and across communities. In New Orleans, pursuing resilience is about recognizing that sea-level rise, flooding and subsidence are ongoing threats to capital that impact human safety, public health, the economy, quality of life and culture of the community.
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Commentary by Mike Foley, the CEO of insurance company Zurich North America. He is also chairman of the board of Zurich Holding Company of America.