The Challenge LGNZ 6 June 2014 100 % Cyber Attacks Data - PowerPoint PPT Presentation

The Challenge LGNZ 6 June 2014

100 % Cyber Attacks Data Indicative National Risk Matrix Severe Weather Hazardous Spill Failed Large Pacific rural flood Global Financial Asia 10 % State Crisis Interstate Cyber Attacks Conflict infrastructure Major Annual Likelihood Transport Accident Human Sustained Drought Pandemic Major Infrastructure Major failure Pest/Disease outbreak Moderate Global Earthquake Conflict 1 % Food Safety Moderate Terrorism Tsunami Systemic Large Failure urban flood Sovereignty Threat To NZ 0.1 % Geophysical Very large Meteorological tsunami Biological Auckland Eruption Technological Social Very Large Conflict eruption Other 0.01 % Minor Catastrophic Major Moderate Relative Consequences

‘Tail - Risk’ from Geological Hazards 10 Frequency Events per year 1 0.1 0.01 10 100 1000 10000 100000 Impacts (fatalities) Source: OFDA/CRED International Disaster Database – www.emdat.be

What should we be preparing for ? In next 50 years (2012 estimates) Natural Hazard Event Likelihood Losses Alpine fault ‐ M8 earthquake 30% >$10bn? Central North Island major eruption almost certain >$1bn Taranaki eruption 20% ~$1bn? 10% >$10bn Hikurangi subduction M8+ EQ and tsunami 50% ~$1bn? Hope fault M7.2 earthquake South America- M9+ EQ & NZ tsunami 50% >$1bn? Taupo region major eruption 10% >$10bn Taupo region volcanic unrest 30%? >$1bn? 5% >>$10bn Auckland volcanic eruption 50% >$10bn NZ equake sequence like 1929-1942

What are the Options? How do we manage natural hazard risk?   Avoid exposure Land use   Control impact Design and build   Transfer or pool Insurance (capital for recovery)   Accept residual Fix post-event; Emergency response capability More explicit thought about trade-offs is needed

Risk Management Approaches Adaptive Capacity - Response and Recovery arrangements ACCEPT Risk Reduction through AVOID Land Use Planning exposure Loss Risk Reduction through Building Design/Controls $ CONTROL impact Recovery funding through Insurance/Capital Markets Adaptive Capacity - Response TRANSFER and Recovery arrangements ACCEPT V. Low High Frequency

Management of Catastrophe Risk The prior question: What is the objective?  Save lives?  Preserve or rebuild buildings and infrastructure?  Maintain or restore economic activity?  Maintain community cohesion?  Minimise social disruption?  And, additionally, what price heritage? Each has different costs and different policy and financial implications

Informed choice or unwelcome surprise? Technically buildings achieved “good performance” Many judged uneconomic to repair

New Zealand Chile Informed choice or unwelcome surprise? New Zealand Chile

How do we find the right balance? Community Assure Well- Being Resilience? Level of Assure Affordability for Amenity … Community 1 Assure …Community 2 Life-Safety …Community 3 …Community n Spending on Risk Reduction

Thank You LGNZ 6 June 2014