Extreme weather events (e.g., hurricanes, tornadoes, hailstorms, wildfires) continue to demand attention due to their escalating devastation and associated costs. These events, affecting organizations nationwide, prompt a closer examination of their implications.
2023 Extreme Weather Recap
Winter’s Wrath
In early 2023, the Northeast experienced abnormally cold weather and unprecedented snowfall, leading to the lowest recorded wind chill (-108°F) in the U.S. and causing $1.8 billion in losses. Subsequent months experienced hailstorms, heavy winds and numerous tornadoes that caused widespread devastation across the Southeastern, Central and Midwest regions. These destructive events resulted in nearly 100 fatalities and losses exceeding $35 billion.
Download our Winter Weather Preparedness Guide.
Summer’s Fury
The summer months brought prolonged droughts and heat waves, adversely affecting agriculture, river commerce and water quality. This led to financial losses of $4.5 billion and 138 fatalities. Record-breaking rainfall in states such as California, Illinois, Kentucky, Vermont and New York caused extensive property damage, exceeding $6 billion in losses, and claimed over 30 lives. The 2023 Atlantic hurricane season included 18 named storms, generating losses surpassing $30 billion and more than 12 lives.
Other Notable Events
Tropical Storm Hilary and Hurricane Idalia were among the most devastating 2023 weather events. Tropical Storm Hilary, a Category 4 hurricane with sustained winds of 145 mph, rapidly formed near the western Mexican coast. Weakening into a tropical storm upon approaching the U.S., it caused record-setting rainfall, flooding, downed trees and mudslides. Hurricane Idalia, a Category 3 storm with sustained winds of 125 mph, struck Florida’s Big Bend region. This hurricane became the most powerful to hit this region in over a century. It generated storm surges (2-8’) and heavy rainfall (5-10”) across Florida, Georgia and the Carolinas.
Secondary Perils Impact
Beyond these large-scale disasters, there’s a growing concern surrounding the aftermath of major storms and smaller-scale weather events known as secondary perils. Examples include Alaska thunderstorms that led to wildfires and the remnants of Hurricane Dora that contributed to a devastating Hawaii firestorm, resulting in $5.6 billion in losses and 97 lives lost. The insurance industry has observed that costs associated with secondary perils have been growing at an annual rate of 6.9% since 2000, surpassing the normal inflation rate. Over the past decade, average annual losses from secondary perils have amounted to $70 billion.
Preparing for the New Norm
Weather experts contend that severe storms, extreme temperatures, wildfires and flooding are the new norm. As these catastrophes occur with greater frequency, the insurance industry must evolve to respond adequately to weather-related damages. Your business should anticipate that carriers will have a heightened focus on weather preparedness to determine your rates, emphasizing the critical importance of proactive measures in reducing the consequences of extreme weather events.
Tips to Protect Your Business from Disasters
Properly preparing for natural disasters is essential for employee wellbeing of employees, protection of assets and uninterrupted business operations. Use these suggestions to effectively prepare your business for natural disasters:
- Create a comprehensive disaster management strategy. Formulate a disaster preparedness and response plan that is tailored to your company’s unique needs and location. Identify potential natural disasters that may pose a threat to your area (e.g., hurricanes, earthquakes, floods, wildfires, tornadoes) and determine their probability and impact.
- Organize an emergency response team. Establish and train a well-organized team that’s accountable for executing a disaster plan. Ensure each team member is fully aware of their respective roles and responsibilities during crises.
- Prioritize employee safety: Ensure employee safety remains a top priority by offering comprehensive training on disaster preparedness and first aid. Establish a robust system that allows for the monitoring of employees’ whereabouts during an emergency.
- Build a communication plan. Create a robust communication strategy to effectively notify employees, customers, vendors and stakeholders in the event of a disaster. Emphasize the importance of utilizing redundant communication channels (e.g., backup power sources) to prevent interruptions of information distribution.
- Protect your data. Regularly back up crucial data and securely store it offsite or in a reliable cloud platform. Establish and enforce disaster recovery protocols to reinstate essential IT systems and data.
- Ensure facilities are secure. Implement measures to retrofit buildings, enabling them to withstand various potential disasters (e.g., earthquakes, hurricanes). Some recommended measures include:
- Obtain proper insurance coverage. Perform a comprehensive evaluation of your insurance policies to ensure sufficient protection from various natural disasters. Familiarize yourself with the specific limitations, deductibles and exclusions outlined in your policy.
We’re Here to Help You Weather the Storm
Facing escalating weather-related challenges, the need for strategic preparedness has never been more critical. Following a year of relentless extreme weather events in 2023, the impact on businesses is undeniable. Organizations must embrace a new norm where proactive weather preparedness is not just a strategy but a necessity. Connect with a member of our team for additional guidance to mitigate your risk.