MANAGING CATASTROPHIC RISK: LESSONS FROM CANADA

Abstract

Natural disasters are a serious threat to societies around the world. Death, injury and displacement affect hundreds of millions of people each year, while the frequency and severity of property damage is rising at an alarming rate. The UN’s International Decade for Natural Disaster Reduction is a recent effort to promote better management of catastrophic risk; nevertheless, losses remain unacceptably high. The authors believe that the knowledge exists to better manage catastrophic risk, and the Canadian experience demonstrates a new approach to build resilient communities and reduce disaster losses. Kunreuther has written extensively about a theoretical framework for public-private partnership in disaster management (Kunreuther 2001). He emphasizes the role that insurance, coupled with well-enforced standards, can play as a tool for reducing future disaster losses and provide funds for financial recovery after a catastrophic event. Kovacs has contributed to the international discussions about climate change, and adaptation to the changing risk of extreme events. He has also written about the Canadian approach to managing disaster risk, the role of insurance and options for prevention through the strengthening of community resilience (Kovacs 1999, 2001). This paper brings the authors together to suggest a comprehensive framework for action to better manage the peril of natural hazards, and review how theory has been put into practice. The paper includes examples primarily from the Canadian experience, supplemented by some from the United States. Our principal purpose is to explore the major issues that have been raised with respect to catastrophic risk management and identify areas of potential further research and policy development in Canada and elsewhere.