Page 68 - Risk Report 2024

IRMSA
68 RISK REPORT 2024/25
Scenario:

What it can look like if it happens now

Several and severe fires break out in a densely populated metropolitan area prone to urban decay and unmanaged
building occupations, and a prolonged heatwave prevents dealing with it effectively. Emergency resources are
unable to recover between events, leading to loss of life, human suffering due to injury levels exceeding hospitals’
ability to cope with the influx, displacement without alternative accommodation, immense asset damages, and
depletion of the insurance industry’s capacity to respond.

Immediate resilience/emergency

preparedness: Medium impact in the

short term

Threat Identification Physical Resilience Supply Chain Vulnerabilities

Conduct comprehensive risk Evaluate and improve the Assess the vulnerability of
assessments and business resilience of facilities, supply chains to weather-
impact analyses to identify equipment, and infrastructure related disruptions and develop
potential threats posed by to withstand extreme weather contingency plans, e.g. diversify
extreme weather events and conditions, e.g. reinforce suppliers, secure alternative
climate change (include mapping buildings, install backup power transportation routes, and maintain
out locations and operations systems, and upgrade drainage buffer stocks of critical materials or
that are particularly vulnerable and flood protection systems. components.
to events like flooding, droughts,
heat waves, or severe storms).

Data Resilience Alternative Work Spaces Emergency Response and
Protect critical business data Develop temporary relocation Evacuation
from weather-related damage or of operations or remote work Establish comprehensive emergency
power outages, with robust and arrangements to deploy in the response and evacuation plans for
accessible data redundancy and event of disrupted access to employees and customers (with
recovery systems, such cloud- primary business locations due regular drills and training sessions
based or off-site data centres. to extreme weather events. to ensure effective execution during
emergencies).

Risk Financing Employee Support Stakeholder Coordination
Review insurance policies in Develop arrangements to support Collaborate with local authorities,
context of dynamic BCPs and to employees affected by extreme emergency services, and community
cover weather-related risks, such weather events, e.g. temporary organisations to coordinate
as property damage, business housing, transport assistance, response efforts and agree to share
interruption, and liabilities. counselling services, access to resources during extreme weather
necessary items such as meals, events.
water, blankets, and clothing.

Climate Change Mitigation Continuity Testing External Trend Monitoring

Implement sustainable and Regularly review and test Collaboration with industry experts,
climate friendly practices, extreme weather scenarios and meteorological agencies, and
e.g. reduce greenhouse gas BCPs to identify gaps and refine relevant Government authorities
emissions, promote energy responses. to stay informed on the potential
efficiency, and support renewable impacts of climate change on
energy sources. operations.