For companies with operations in Texas, Florida or Puerto Rico, last year’s hurricane season brought not only catastrophe to their communities, but also a wake-up call on how to better manage this type of risk going forward.
To explore what happened last year and found out how to improve going forward, FM Global, a commercial and industrial property insurance company, conducted a survey of surveyed senior financial executives at Fortune 1,000 U.S.-based companies with operations in Texas, Florida or Puerto Rico.
One conclusion of the survey was that executives admitted they were not totally prepared and are making improvements for the future.
“These candid admissions drive home a fundamental truth about catastrophe,” said Dr. Louis Gritzo, vice president, manager of research at FM Global. “People routinely fail to understand or acknowledge the magnitude of risk until they’ve experienced a fateful event.”
Findings of the survey include:
--Nearly two-thirds (64%) of the respondents said 2017’s hurricane season had an adverse impact on their operations.
--Of those impacted, 62% admitted they were “not completely prepared” to deal with the effects of the hurricanes.
--Meanwhile, nearly 7 in 10 (68%) of all respondents said they will make changes to their risk management strategy going forward.
As a result of hurricanes Harvey, Irma and Maria:
- 57% of all survey respondents said they will put in place or enhance their business continuity or disaster recovery plans.
- 40% will invest more in risk management, property loss prevention, and/or reassess their supply chain risk management strategy.
- 25% will reassess their insurance coverages or their insurers.