Risk Insider: Jon Hall

A Rising Tide

By: | June 22, 2017 • 3 min read
Jonathan W. Hall is chief operating officer at FM Global. He oversees FM Global’s insurance operations and insurance staff functions, as well as the FM Global Resilience Index, a data driven resource that ranks the business resilience of 130 countries and regions. He can be reached at [email protected]

Earthquakes. Tropical cyclones. Snow. Flooding. Of all the natural hazards, studies show that flood is the most expensive. According to a report published by Aon Benfield in 2016, flooding was the costliest overall peril for the fourth consecutive year, at $62 billion.

Our world’s climate is changing, and some weather patterns are shifting. Due to the rise in world population, a rise in value at risk, increasing vulnerability due to globalization, and the rapid development of emerging markets which are less resilient, property loss from natural catastrophes has been, and will continue to be, ever more costly.

Many businesses are questioning if they’re doing enough to prepare for and adapt to these catastrophes. But just how should businesses plan to stem the rising tide? Of all the natural disaster losses, flood loss can be both the most predictable and the most preventable, so armed with clear information, businesses can take action to protect their value.

The most obvious action is to locate far from low-lying river, coastal or other flood-prone areas. If that isn’t possible, however, there are some proactive steps businesses can take to reduce their risk of potential flood damage and business interruption.

Among the preparations businesses can take to reduce the impact of flood is permanently moving all electrical, computer and telecommunications equipment safely out of low-lying interior and outside areas to settings above the flood level.

Flood preparation and awareness are key. Facilities located within high-hazard flood zones will eventually experience major flooding. In addition, FM Global has always recommended that clients not build in moderate-hazard (500-year flood-exposed) areas. In fact, in many areas around the world, building codes and regulations now call for critical infrastructure occupancies, such as utilities, emergency services, schools and hospitals, to build higher or protect against the 500-year flood level.

Nearly one in 10 commercial facilities are already located within a flood zone, and the best loss prevention practice for these properties is unremitting vigilance. While there is no way to prevent a flood from occurring, businesses can enhance their resilience by preparing for whatever precipitation extremes could occur. This can’t happen, however, without a contingency plan. Without a plan, buildings, machinery, data centers, transportation networks, supply chains, employees and customers are all at risk.

Facilities at risk for flooding must prepare well in advance to keep water out of business-critical areas to limit downtime and service interruptions. Smart businesses have a clear plan for what they will do when flooding is imminent, including choosing the best location for their flood barriers, sealing walls and floors, and providing flood pumps and other mitigation equipment that will help maintain business continuity.

Among the preparations businesses can take to reduce the impact of flood is permanently moving all electrical, computer and telecommunications equipment safely out of low-lying interior and outside areas to settings above the flood level.

FM Global’s recently released interactive Global Flood Map presents business executives with a powerful strategic planning tool, and risk managers with a way to address potential flood exposure around the world. Built using hydrology and hydraulic science, the Global Flood Map considers, among other factors, essential information like rainfall, evaporation, snowmelt and terrain. A version of the map is available for use by businesses and the public at no cost.

The map can help users determine whether their business locations reside in a potential flood zone by simply typing in physical addresses. The map identifies potential 100 year flood zones — highlighted in pink — and potential 500-year flood zones highlighted in yellow. The term 100-year flood exposure can be misleading. Over the 30-year life of a facility (or a risk manager’s career), there is a one in four chance your facility will flood if it is located in a 100-year flood zone, and a one in six chance if it is located in a 500-year zone.

Knowing their unique flood risk helps prepare businesses to implement the best solutions for when a disaster strikes, and gives them the opportunity to stem the rising tide.

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession

This senior risk manager values his role in helping Varian Medical Systems support research and technologies in the fight against cancer.
By: | September 12, 2017 • 5 min read

R&I: What was your first job?

When I was 15 years old I had a summer job working for the city of Plentywood, mowing grass in the parks and ballfields, emptying garbage cans, hauling waste to the dump, painting crosswalk lines.  A great job for a teenager but I thought getting a college degree and working in an air-conditioned office would be a good plan long term.

R&I: How did you come to work in risk management?

I was enrolled in the University of Montana as a general business student, and I wanted to declare a more specialized major during my sophomore year. I was working for my dad at his insurance agency over the summer, and taking new agent training coursework on property/casualty risks in my spare time, so I had an appreciation for insurance. My dad suggested I research risk management for a career, and I transferred sight unseen to the University of Georgia to enroll in their risk management program. I did an internship as a senior with the risk management department at Sulzer Medica, and they offered me a full time job.

R&I: What could the risk management community be doing a better job of?

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We need to do a better job of saying yes. We tend to want to say no to many risks, but there are upside benefits to some risks. If we initiate a collaborative exercise with the risk owners — people who may have unique knowledge about that particular risk — and include a cross section of people from other corporate functions, you can do an effective job of taking the risk apart to analyze it, figure out a way to manage that exposure, and then reap the upside benefits while reducing the downside exposure. That can be done with new products and new service offerings, when there isn’t coverage available for a risk. It’s asking, is there anything we can do to reduce the risk without transferring it?

R&I: What emerging commercial risk most concerns you?

Cyber liability. There’s so much at stake and the bad guys are getting more resourceful every day. At Varian, our first approach is to try to make our systems and products more resilient, so we’re trying to direct resources to preventing it from happening in the first place. It’s a huge reputation risk if one of our products or systems were compromised, so we want to avoid that at all costs.

We need to do a better job of saying yes. We tend to want to say no to many risks, but there are upside benefits to some risks.

R&I: What insurance carrier do you have the highest opinion of?

I’ve worked with a number of great ones over the years. We’ve enjoyed a great property insurance relationship with Zurich. Their loss control services are very valuable to us. On the umbrella liability side, it’s been great partnering with companies like Swiss Re and Berkley Life Sciences because they’ve put in the time and effort to understand our unique risk exposures.

R&I: How much business do you do direct versus going through a broker?

One hundred percent through a broker. I view our broker as an extension of our risk management team. We benefit from each team member’s respective area of expertise and experience.

R&I: Is the contingent commission controversy overblown?

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I think so. The brokers were kind of villainized by Spitzer. I think it’s fair for brokers and insurers to make a reasonable profit, and if a portion of their profit came from contingent commissions, I’m fine with that. But I do appreciate the transparency and disclosure that came out as a result of the fiasco.

R&I: Are you optimistic about the US economy or pessimistic and why?

David Collins, Senior Manager, Risk Management, Varian Medical Systems Inc.

While we might be doing fine here in the U.S. from an economic perspective, the Middle East is a mess, and we’re living with nuclear threat from North Korea. But hope springs eternal, so I’m cautiously optimistic. I’m hoping saner minds prevail and our leaders throughout the world work together to make things better.

R&I: Who is your mentor and why?

My Dad got me started down the insurance and risk path. I’ve also been fortunate to work for or with a number of University of Georgia alumni who’ve been mentors for me. I’ve worked side by side with Karen Epermanis, Michael Rousseau, and Elisha Finney. And I’ve worked with Daniel Dean in his capacity as a broker.

R&I: What have you accomplished that you are proudest of?

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Raising my kids. I have a 15-year-old and 12-year-old, and they’re making mom and dad proud of the people they’re turning into.

On a professional level, a recent one would be the creation and implementation of our global travel risk program, which was a combined effort between security, travel and risk functions.

We have a huge team of service personnel around the world, traveling to customer sites to do maintenance and repair. We needed a way to track, monitor and communicate with them. We may need to make security arrangements or vet their lodging in some circumstances.

R&I: What do your friends and family think you do?

My 12-year-old son thought my job responsibilities could be summed up as a “professional worrier.” And that’s not too far off.

R&I: What about this work do you find the most fulfilling or rewarding?

Varian’s mission is to focus energy on saving lives. Proper administration of the risk function puts the company in a better position to financially support research that improves products and capabilities, helps to educate health care providers and support cancer care in general. It means more lives saved from a terrible disease. I’m proud to contribute toward that.

When you meet someone whose cancer has been successfully treated with one of our products, it’s a powerful reward.




Katie Siegel is an associate editor at Risk & Insurance®. She can be reached at [email protected]