DailyFinance.com is projecting that the recent 8.8 magnitude earthquake in Chile could cause insured losses anywhere from billion to more than billion.
The quake struck February 27th and is now believed to be one of the top 10 most powerful earthquakes ever.
Catastrophe modeling company EQECAT Inc. said insured damages from the quake could range from $3 billion to $8 billion, with economic losses ranging from $15 billion to $30 billion. Economic losses will continue to be updated as the ongoing assessment of infrastructure damage is confirmed. The company also said the speed of restoration of the transportation and utility networks will also determine the total amount of business interruption losses claimed.
Effects of the earthquake stretched from 115 miles north of the industrial city of Concepcion to the capital of Santiago — more than 325 miles away from the epicenter.
“AIR Worldwide estimates that the value of insurable buildings in the quake zone is $275 billion, but very few of the structures are likely to have been insured. The company said that as little as 10% of residential buildings are believed to have been insured and about 60% of the commercial structures were insured.”
The Haitian earthquake and Chilean earthquake differ drastically in terms of insurance. Though the earthquake that struck Chile was approximately 500 times as powerful as the one that struck Haiti, Chile will recover more quickly because of it’s highly developed insurance market. In an article release today, Robert Hartwig, president of the Insurance Information Institute (I.I.I.) said that “in addition to a number of Chilean insurers, many large international insurers and reinsurers—mainly American and European—compete for business in that country, and will provide the financial resources for Chile’s reconstruction.” He contrasted the situation to that in Haiti, an area that Hartwig said has almost no private insurance market.
In the March issue of Risk Management, our editor, Jared Wade, takes an in-depth look at the catastrophe in Haiti and the future of natural disasters. A good read, I must say.
Faithful readers — it’s the moment you’ve (maybe?) been waiting for since last month’s issue of Risk Management was put online. The March issue is now available here.
Within it, you’ll find features focusing on Haiti and the future of disasters, brain injury recovery, ERM challenges and CEO succession planning.
Check out the digital edition, which offers stunning graphics and all the pleasures of the print edition right there on your computer screen. Please let us know if you have any questions or comment.
“No one knows with precision, no one can confirm a figure,” Victor Jackson, an assistant national coordinator with Haiti’s Red Cross, told Reuters news service when giving the estimated death toll. “We also think there are 3 million people affected throughout the country, either injured or homeless.”
President Obama has pledged an initial $100 million towards recovery efforts, which come in addition to the on-the-ground efforts that Washington is contributing, which Hillary Clinton spoke about on the Today Show this morning in the video below (via The Lede).
“We are doing all we can to can to figure out how to best attack the devastation all around. This is going to be a long-term effort. We have the immediate crisis of trying to save those lives that can be saved, to deal with the injured and the dead, to try to provide some food, water, medical supplies, some semblence of shelter. And then [we have] to work with our Haitian partners, the government of Haiti, NGOs, others to begin the rebuilding process.”
The Secretary’s added these thoughts on the communications challenge:
The President thankfully is safe — he has nowhere to live, his home was in the palace. He is working closely with those members of his government that can be located and communicated with. We have brought in communications systems to try to create some means for the government to function.
She also announced that the TEXT “HAITI” TO 90999 campaign has raised $3 million so far through the Red Cross and that anyone looking for information about loved ones who may have been affected by the disaster can call 1-888-407-4747 to contact the State Department Operations Center.
President Obama promised an all-out rescue and humanitarian effort including military and civilian emergency teams from across the U.S. The aircraft carrier USS Carl Vinson was expected to arrive off the coast Thursday, and the Navy said the amphibious assault ship USS Bataan had been ordered to sail as soon as possible with a 2,000-member Marine unit. An advance group of more than 100 soldiers from the 82nd Airborne Division will leave Fort Bragg in North Carolina on Thursday to prepare for the arrival of several hundred more from the division on Friday.
The Pentagon’s Southern Command dispatched a 30-member assessment team to work out of the U.S. Embassy, the aircraft carrier USS Carl Vinson toward the coast, a reconnaissance plane to survey the damage and Coast Guard aircraft to evacuate some of the 45,000 Americans in Haiti.
Air Force Gen. Douglas Fraser, the Southcom chief, also said the Pentagon might deploy an amphibious Navy ship with a Marine expeditionary unit and possibly thousands of soldiers from the 82nd Airborne Division. They could help distribute relief supplies and keep the peace.
The Pentagon’s Southern Command dispatched a 30-member assessment team to work out of the U.S. Embassy, the aircraft carrier USS Carl Vinson toward the coast, a reconnaissance plane to survey the damage and Coast Guard aircraft to evacuate some of the 45,000 Americans in Haiti.
Air Force Gen. Douglas Fraser, the Southcom chief, also said the Pentagon might deploy an amphibious Navy ship with a Marine expeditionary unit and possibly thousands of soldiers from the 82nd Airborne Division. They could help distribute relief supplies and keep the peace.
The global relief effort did pick up steam Thursday with the arrival of an Air China flight carrying search-and-rescue teams, medics, trained search dogs and aid supplies. A British flight with a government assessment team and 71 rescue specialists along with heavy equipment arrived in the neighboring Dominican Republic. The crew prepared to head to Haiti. A Los Angeles County Fire Department 72-member search team left for the Caribbean island nation late Wednesday.
The United Nations released $10 million from its emergency funds, even as U.N. forces in Haiti struggled with their own losses. The U.N. headquarters building collapsed in Port-au-Prince, and at least 16 personnel are confirmed dead, with up to 150 still missing, including mission director Hedi Annabi of Tunisia and his chief deputy, Luis Carlos da Costa.
“We’ll be using whatever roads are passable to get aid to Port-au-Prince, and if possible we’ll bring helicopters in,” said Emilia Casella, a spokeswoman for the U.N. food agency in Geneva.The global relief effort did pick up steam Thursday with the arrival of an Air China flight carrying search-and-rescue teams, medics, trained search dogs and aid supplies. A British flight with a government assessment team and 71 rescue specialists along with heavy equipment arrived in the neighboring Dominican Republic. The crew prepared to head to Haiti. A Los Angeles County Fire Department 72-member search team left for the Caribbean island nation late Wednesday.
As most in the disaster recovery business know, we are now moving past the 36-hour mark, beyond which a lot of noble rescue efforts start to prove ineffectual. The next 12-24 hours will be vital in trying to rescue as many survivors as possible and getting people the basic water, food, medical care and shelter they need.
You can see more on the unimaginable difficulties that the authorities are facing in the (graphic) video below. (via CNN.com)
Godspeed.
Bill Clinton has also articulated exactly “What Haiti Needs” in a piece he wrote for Time.
We need to get as much equipment as we can into Haiti. The military is sending in helicopters, and there will probably be a need for it to supply some logistics and communications support. The U.S. is going to have to carry a lot of the load there early on. But it’s very important that the U.S., which is so pivotal to this emergency period, work very closely with the U.N. peacekeeping mission stationed in Haiti, which is very well organized and is operating well. In fact, the U.N. system has already swung into action: it has offered $10 million in immediate emergency relief and organized food relief through the World Food Programme. There are hundreds of thousands of people that are going to be coming out of there alive that have to be cared for; the World Health Organization is trying to meet the health care needs.
The international relief effort that followed the Asian tsunami of 2004 offers some lessons that can be applied in Haiti. First of all, there has to be national buy-in by the U.S. There has to be a national vision, and I think we have that. Secondly, coordination is really important both within the U.N. and among all the donor countries and nongovernmental groups. There are 10,000 nongovernmental organizations working in Haiti, the highest number per capita in the world except for India. We’ve got to all work together toward a common goal. We have to relentlessly focus on trying to build a model that will be sustainable, so we don’t plant a bunch of trees and then revert to deforestation, or adopt a program to bring power to the country that can’t be sustained, or adopt an economic strategy that is going to wither away in two years.
I’m trying now to get organized to make sure not only that we get the emergency aid that Haiti needs but also that donors come through on their pre-existing commitments. We need to keep the private sector involved. Once we deal with the immediate crisis, the development plans the world was already pursuing have to be implemented more quickly and on a broader scale. I’m interested in just pressing ahead with it.
Thankfully, he also offers something we can all use right now: Hope.
Haiti isn’t doomed. Let’s not forget, the damage from the earthquake is largely concentrated in the Port-au-Prince area. That has meant a tragic loss of life, but it also means there are opportunities to rebuild in other parts of the island. So all the development projects, the agriculture, the reforestation, the tourism, the airport that needs to be built in the northern part of Haiti — everything else should stay on schedule. Then we should simply redouble our efforts once the emergency passes to do the right sort of construction in Port-au-Prince and use it to continue to build back better.
Before this disaster, Haiti had the best chance in my lifetime to fulfill its potential as a country, to basically escape the chains of the past 200 years. I still believe that if we rally around them now and support them in the right way, the Haitian people can reclaim their destiny.
(UPDATE: In an interview with CNN’s Sanjay Gupta, Haitian President Rene Preval has more recently said that he has “heard reports of death tolls ranging from 30,000 – 100,000” but that “it’s too early to give a number.”)
For the island nation of 10 million people, this has now gone from horrifically tragic to entirely unthinkable.
The Miami Herald should also presumably be able to show the human tragedy better than most in the hours and days to come given its proximity to the island and large Haitian population (which is something that can only be matched in America by New York City).
UPDATE:
Here’s is Anderson Cooper’s first-hand report as he flew over Port-au-Prince in a helicopter at around 10:00 am this morning. (via Huffington Post)
I’ve made this trip before. In 1994 I drove into Haiti from the Dominican Republic. It wasn’t a natural disaster then, it was a man-made one.
The military dictator who was running Haiti was about to be run out of town, and U.S. forces were on their way to return the democratically elected president, Jean-Bertrand Aristide. It was a scary time. The thugs who worked for the government still roamed the streets. When U.S. forces finally arrived, I was at the port waiting for them along with hundreds of excited Haitians.
I will never forget the joy, the hope, it was palpable. People hugged one another in the streets. I remember a Haitian woman grabbing me, saying “merci, papa,” as if I had something to do with it. I didn’t. I just felt lucky to be there.
I’ve been back to Haiti a lot over the years, in good times and bad. It is a remarkable country, the people are strong. To survive they have had to be. I wish them strength in the difficult hours and days ahead.
1 p.m. — 40,000-45,000 Americans in Haiti, the U.S. State Department says. The Embassy has been in touch with about 40. No confirmed deaths. About a dozen injured. “Clearly that will go up,” says Assistant Secretary P.J. Crowley.
12:30 p.m. — At least 15 U.N. peacekeepers reported dead.
UPDATE:
CBS has video of rescue and recovery efforts from last night. (via The Lede)
UPDATE:
The video below contains another first-hand audio report from Anderson Cooper, talking about what sounds to be a non-existent recovery effort in Port-au-Prince. (via CNN.com)
“No matter what street you go down in this area, there is someone trying to be rescued. There are flattened buildings with small groups of neighbors and family literally digging through the rumble — digging through concrete — with their hands. With their fingers. Occasionally you see a shovel or a pickaxe or a chisel. It is slow, laborious work and it is often unsuccessful work. Many times the voices which were crying out hours ago are now silent.”
Later on, he adds:
“In the downtown streets of Port-au-Prince, I haven’t seen any heavy earth-moving equipment whatsoever … I haven’t seen any concerted, organized relief effort. What I’ve seen is neighbors pulling together for neighbors, family members desparately trying to do what they can to save their loved ones. You find a lot of people just standing outside of destroyed buildings and you go up and start talking to them and they’ll say ‘My wife is inside.’ And you say ‘Is she alive?’ and they just shake their head. ‘No. She’s dead.’ And yet they have nowhere else to go. They’re just standing there and there is no chance that person is going to be removed from that building any time soon.”
He also talks more on the heart-crushing death toll he has already seen.
“There are bodies — I don’t want to say on every block — but it’s every few blocks. You see a white shroud on the street corner or in the gutter and you know it’s a body. Or three bodies. Or four bodies. Sometimes they’re not even covered in shrouds, they’re just laid out like that. I just saw what must have been a five-year-old, six-year-old girl whose body was covered by part of a cardboard box.”
Listen to the full 7-minute account here.
In medical relief news, Doctors Without Borders had three facilities in Haiti but all three were severely damaged in the quake to the point that they are now unusable. They’ve shifted to temporary shelters, but cannot provide much in the way of real care in such a limited environment. The Lede has a transcript of the below video, which contains this somber announcement from Paul McPhun, the organization’s operations director in Haiti:
“The best we can offer them at the moment is first-aid care and stabilization. The reality of what we’re seeing is severe traumas—head wounds, crushed limbs—severe problems that cannot be dealt with at the level of care we currently have available with no infrastructure really to support it. So our major priority and focus is to re-establish as soon as possible a secondary level of surgical capacity in the country.”
Devastating. If there’s any good news in the below video, it’s that they “should have another 70 international staff available over the next few days with specialties available to respond to these more immediate medical emergency needs.”
