New framework to help improve cities' infrastructure resilience: Lloyd's/Arup report
Source: Asia Insurance Review | May 2017
Cities will need to overhaul their approach to risk management if they are to make their infrastructure more resilient to catastrophic events. While risk management remains a priority for cities, it is not enough on its own, or on an asset-by-asset basis. Increasingly, officials, investors and insurers will need to build resilience within and between infrastructure systems as a complementary approach to address infrastructure risk and uncertainty.
This is according to a recently issued report, Future Cities: Building Infrastructure Resilience, from Lloyd’s and global engineering consulting firm Arup, which sets out three steps designed to help guide the planning, design, construction and operation of core city infrastructure to improve their ability to cope with and recover from disasters:
- Prevent failure: make city infrastructure more resilient to shocks so that even if parts of it fail temporarily, the overall system still works;
- Expedite recovery: examine ways in which infrastructure can be restarted as quickly as possible post-disaster to save lives and prevent further failures; and
- Transform performance: replace damaged infrastructure with a more resilient version as part of the rebuilding process.
Lloyd’s said that the insurance sector could also take collective action to work with stakeholders and build greater city resilience in nine areas:
- Improving data collection;
- Using this new data to quantify the risk and help inform stakeholder decision-making;
- Establishing metrics to enable the development of indices and models to assess resilience;
- Finding ways to incentivise investment by making resilience assessments available;
- Incentivising policyholders to take risk mitigation measures through risk-based pricing;
- Developing collaborative models and tools that provide a transparent, comprehensive and accessible approach to analysing and pricing risk;
- Encouraging the creation of indices that can be used by insurers to incorporate levels of resilience into the underwriting process;
- Creating shared understanding of how the components and stakeholders of cities interact and what the key areas and concerns are for each stakeholder; and
- Considering resilience services which draw on facilities management, disaster recovery, build and operate contracts and insurance. A