Column: Risk Management

Sizing Disaster

By: | November 1, 2017 • 3 min read
Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at [email protected]

I write this column in a week following many serious natural disasters — Hurricanes Harvey and Maria and the less discussed Hurricane Nate. It is the impact of Nate, specifically, that I feel personally. I spend much time throughout the year in the beautiful country of Costa Rica.


This week, the tropical storm surges of Nate caused many deaths and left thousands of people, some of them friends and neighbors, desolate.

As of today, many of my friends are still without water, power, roads, bridges and essential services. Rivers exploded from flash flooding and washed their homes and land into the ocean in just a matter of hours.

Worse still, people had to sleep in trees as to not to be eaten by crocodiles, which are now swimming freely in streets and back yards.

The average wage in Costa Rica is about $4 per hour, so the idea of buying insurance is a pipe dream for most and considered a luxury item for the wealthier. Replacing a basic appliance such as a refrigerator will no doubt be a deep financial struggle for the average family and will likely take a few years to repay or procure. It is heartbreaking.

For this reason, I deeply took to heart the words of President Trump when he clumsily compared Hurricane Katrina to Maria and stated one was a “real” disaster as it had more casualties than the other. As awkward as this statement was, it did make me think.

Do we, in our risk management community, have a consistent way of measuring and ranking one disaster over another? Do we have a system that can clearly paint a holistic picture of the full range of impacts in a catastrophe?

The average wage in Costa Rica is about $4 per hour, so the idea of buying insurance is a pipe dream for most and considered a luxury item for the wealthier.

Quick research seems to indicate we often rank disasters using three metrics: number of fatalities, economic loss and insured loss.

At first glance, these sole metrics are deeply inadequate to portray the true impact of such natural disasters.

What of long-term resultant injuries, loss of uninsured habitat, recovery ability and duration, total population affected, gravity and concentration of property damage, crop destruction, and social damage?

There are so many other effects on humans and the environment critical to understand.

With hurricanes in the U.S. accounting for about two-thirds of all insured losses, we have done much in the way of developing sophisticated hurricane tracking and early warning systems. Truly impressive feats.

This work in turn reduced the number of fatalities and assisted in much-improved evacuation planning efforts. But it feels as if we are left blind to the real magnitude and diversity of impacts.


The fundamental difference between disaster management and risk management is that it is emergency and recovery management. Effective emergency management requires us to pre-quantify and properly size all potential damages, losses and post-disaster needs.

Assessing the potential scale and duration of needs before the return to normalcy and re-establishment of basic services is essential for meaningful disaster planning and budgeting.

I see a need to better aggregate data that measures true diversity of disaster impacts to assist us in future planning.

I would like to see the development of some form of universal disaster index with clear classifications, which has the means of describing disasters in a multidimensional and unified way. Only with that will insurers, communities, responders, government and the public really stand to gain. &

More from Risk & Insurance

More from Risk & Insurance

The Profession

Curt Gross

This director of risk management sees cyber, IP and reputation risks as evolving threats, but more formal education may make emerging risk professionals better prepared.
By: | June 1, 2018 • 4 min read

R&I: What was your first job?

My first non-professional job was working at Burger King in high school. I learned some valuable life lessons there.

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

After taking some accounting classes in high school, I originally thought I wanted to be an accountant. After working on a few Widgets Inc. projects in college, I figured out that wasn’t what I really wanted to do. Risk management found me. The rest is history. Looking back, I am pleased with how things worked out.

R&I: What is the risk management community doing right?


I think we do a nice job on post graduate education. I think the ARM and CPCU designations give credibility to the profession. Plus, formal college risk management degrees are becoming more popular these days. I know The University of Akron just launched a new risk management bachelor’s program in the fall of 2017 within the business school.

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

I think we could do a better job with streamlining certificates of insurance or, better yet, evaluating if they are even necessary. It just seems to me that there is a significant amount of time and expense around generating certificates. There has to be a more efficient way.

R&I: What was the best location and year for the RIMS conference and why?

Selfishly, I prefer a destination with a direct flight when possible. RIMS does a nice job of selecting various locations throughout the country. It is a big job to successfully pull off a conference of that size.

Curt Gross, Director of Risk Management, Parker Hannifin Corp.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

Definitely the change in nontraditional property & casualty exposures such as intellectual property and reputational risk. Those exposures existed way back when but in different ways. As computer networks become more and more connected and news travels at a more rapid pace, it just amplifies these types of exposures. Sometimes we have to think like the perpetrator, which can be difficult to do.

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

I hate to sound cliché — it’s quite the buzz these days — but I would have to say cyber. It’s such a complex risk involving nontraditional players and motives. Definitely a challenging exposure to get your arms around. Unfortunately, I don’t think we’ll really know the true exposure until there is more claim development.

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


Our captive insurance company. I’ve been fortunate to work for several companies with a captive, each one with a different operating objective. I view a captive as an essential tool for a successful risk management program.

R&I: Who is your mentor and why?

I can’t point to just one. I have and continue to be lucky to work for really good managers throughout my career. Each one has taken the time and interest to develop me as a professional. I certainly haven’t arrived yet and welcome feedback to continue to try to be the best I can be every day.

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

I would like to think I have and continue to bring meaningful value to my company. However, I would have to say my family is my proudest accomplishment.

R&I: What is your favorite book or movie?

Favorite movie is definitely “Good Will Hunting.”

R&I: What’s the best restaurant you’ve ever eaten at?

Tough question to narrow down. If my wife ran a restaurant, it would be hers. We try to have dinner as a family as much as possible. If I had to pick one restaurant though, I would say Fire Food & Drink in Cleveland, Ohio. Chef Katz is a culinary genius.

R&I: What is the most unusual/interesting place you have ever visited?

The Grand Canyon. It is just so vast. A close second is Stonehenge.

R&I: What is the riskiest activity you ever engaged in?


A few, actually. Up until a few years ago, I owned a sport bike (motorcycle). Of course, I wore the proper gear, took a safety course and read a motorcycle safety book. Also, I have taken a few laps in a NASCAR [race car] around Daytona International Speedway at 180 mph. Most recently, trying to ride my daughter’s skateboard.

R&I: If the world has a modern hero, who is it and why?

The Dalai Lama. A world full of compassion, tolerance and patience and free of discrimination, racism and violence, while perhaps idealistic, sounds like a wonderful place to me.

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

I really enjoy the company I work for and my role, because I get the opportunity to work with various functions. For example, while mostly finance, I get to interact with legal, human resources, employee health and safety, to name a few.

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

I asked my son. He said, “Risk management and insurance.” (He’s had the benefit of bring-your-kid-to-work day.)

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