Well protected against weather extremes

The GrECo Risk Engineering GmbH offers individual analyses for protection concepts against floods & Co. A targeted risk management can protect your business facilities or the appropriate crop insurance can minimize the risk of harvest loss as well as seed and fruit damage.

If you think back to the beginning of the Corona crisis and the time in the home office, you will especially remember the beautiful April with early summer temperatures that made the lockdown and exit restrictions a challenge.

The ZAMG (Central Institute for Meteorology and Geodynamics) speaks of the fourth warmest April since the beginning of measuring history (i.e. since the 18th century) and of one of the driest springs ever. There were almost 20% more hours of sunshine than on average (+ 55% in April) and temperatures were almost 1 °C above average (+ 2.1 °C in April). In the months of March and April there was 45% less precipitation than the long-term average (1981-2010), in Eastern Austria even 71% less. The rain in May could not compensate the extreme dryness of the previous months. Overall, this year there was about 30% less rainfall.

Due to the mild beginning of the year, many plants sprouted up to three weeks earlier. The rain-prone month of May could just about prevent a catastrophic crop failure. Nevertheless, the missing harvests resulted in a lack of grass cuttings, which are urgently needed as fodder for the animal supply. Conclusion: In addition to the corona crisis, the situation for agricultural enterprises has worsened immensely.

The number of extreme events is increasing worldwide

An ongoing project of ZAMG showed that since 2000 a significant increase of weather conditions with bad weather potential of 30% – 50% is visible. This is, among other things, a direct consequence of the increase in the water vapor content of the air caused by the rise in temperature. Due to the increasing warming, the thunderstorm season in Austria is extending towards spring and autumn.

Evidence of the increase in such weather extremes was already evident in June. The long heavy rainfall in Lower Austria led to flooded fields, debris flows, local flash floods, roadblocks, flooded cellars and demanded about 100 storm-operations by the local fire departments. In July, the series of storms continued in the western provinces of Austria such as Salzburg and Tyrol.

The trend towards such extreme events is also evident worldwide. Severe thunderstorms with heavy rainfall swept over areas of the USA, while at the same time heat waves were announced in other parts of the country, such as California. China was hit by a catastrophic flood at the end of June, triggered by the heaviest rainfall in 70 years. The rising number of forest fires, as e.g. in Australia and the USA, is also attributed to the consequences of the weather extremes.

Preventive protection concepts against floods & Co.

Unlike weather phenomena such as drought and aridity, hydrological hazards such as floods, debris flows and surface runoff are much more predictable and can be dealt with at a local level. In general, especially in Central Europe, superregional flood protection is taken over by the state. However, if the properties of companies are located in areas that were not designated as flood areas at the time of construction, it is necessary to take your own preventive protection measures.

The GrECo Risk Engineering GmbH (GREG) offers consulting services such as risk identification and analysis, evaluation and risk assessment of threat potentials from natural disasters as well as preventive action planning. In this way, technically efficient and economically feasible solutions are developed together with the companies in order to be prepared in case of floods, for example, and to prevent potential damage and shutdown of operations.
The risk consultants of our GREG team rely on internationally proven protection measures and the state of the art in natural hazard management and flood protection in particular.

Tailor-made insurance solutions covering property damage and business interruption due to natural events round off an effective protection concept.

Crop insurance as a protective shield for farmers

Due to climate change, farmers also face new challenges in their risk management. Beside sustainable farming methods, dry periods and drought can often only be countered with artificial irrigation. Since such a measure is tied to a multitude of factors (infrastructural conditions, available water resources, soil conditions, etc.) and generally requires very high investment costs, GREG offers individual analyses, which at the same time provide a basis for appropriate insurance protection.

A risk-adequate crop insurance contributes to keeping the economic risk of losses and damage low by providing appropriate coverage.

Related Insights

Günther Kundela

GrECo Risk Engineering

Tel.: +43 5 0404 354

High risk, excellent fire protection

Competitive insurance market for timber industry and recycling companies

The premiums in corporate property insurance are currently rising in all industries and loss-affected insurance contracts and types of establishments that are classified as critical, such as the timber industry and recycling companies, are especially hard hit by the consequences.

The triggers for market hardening were primarily the negative results of international corporate insurers and the lower number of providers as a result of company mergers. In addition to the premium increases, the different, more cautious risk and underwriting policy is also particularly evident among insurers with less capacity available for “risky” industrial risks (compared to the “normal” core business) on the market.

Few providers

A particular challenge at present is posed by the placement of insurance solutions for timber processing businesses and recycling companies: there are currently very few providers that accept requests for these industries. The majority of market players refuse to submit an offer from the start because claims experience does not suggest a positive business development. The remaining insurers now focus mainly on compliance with safety standards, preventative and precautionary fire protection, and the general attitude towards risk management in companies. They are checking in detail the extent to which their minimum requirements have been met and are also requesting additional detailed information on the current risk situation.

Risk mitigation measures

The insurability of their member companies has been a hot topic for the professional associations of the aforementioned industries for years, which is why the decision has been taken proactively to help improve the claims situation. The professional association of the Austrian timber industry and recently the association of Austrian waste disposal businesses, for example, has published its own guidelines for fire protection. These were produced in conjunction with fire protection experts and the insurance association. This means that specific recommendations for improving risk quality are provided, along with an overview of the fire protection measures requested by many insurers.

The extent to which existing fire protection equipment meets the recommendations of these guidelines can be checked using GrECo’s self-assessment tool. A corresponding report is generated after all relevant data has been entered, and clearly depicts the current risk situation. From the report, our risk engineers can then develop a tailored set of risk improvement measures.

GrECo Risk Engineering GmbH is pleased to offer advice here and is also available for individual analyses of the existing risk situation and to specify risk-improving measures.

Related Insights

Rudolf Schiel

Practice Leader Property & Engineering

T +43 664 822 27 58

Blackout – when it suddenly gets dark

While we’re all still dealing with the effects of the COVID-19 crisis, the next shutdown could be just around the corner. Experts predict that a so-called blackout will occur within the next five years. This is a large-scale failure of the power supply that would result in the collapse of the entire infrastructure and furthermore cause catastrophic restrictions in our everyday life. Because without electricity everything stands still: telecommunications, water and fuel supply, traffic control, heating and air conditioning, computer systems and much more are not available for an indefinite period of time, which can result in significant business interruptions for all industries and production companies.

The triggers are manifold…

There could be many reasons for a blackout: cyber and terrorist attacks, natural disasters, human error and, above all, insufficient network stability. The power supply is based on systems that are prone to errors due to their complexity, which triggers chain reactions that can lead to nationwide service interruptions. It is not possible to permanently eliminate all these potential causes, so the threat of a future blackout is severe.

In March 2015, for example, 80 out of 81 provinces in Turkey suffered a 10-hour power outage. Public transport stopped, traffic lights failed and the result was a fundamental traffic chaos. The total economic damage amounted to several hundred million EUR. Initially, a cyber-attack was suspected as the trigger, but in the end the variations in the Turkish power grid were identified as the cause of the blackout.

Similar incidents have occurred on all continents several times in the past decades, but what is striking is the increasing number of power outages in recent years, which is probably due to the increasingly complex networking of the power infrastructure and the growing proportion of alternative power generation with wind mills or solar energy.

…the solutions in risk and insurance management as well!

Whether and to what extent property and business interruption policies provide insurance protection for the consequences of such events can only be assessed for the individual cases and depends on the respective circumstances and the underlying insurance conditions. In the common extension clauses for business interruption damage due to service interruption, however, the occurrence of physical property damage (e.g. a fire at the suppliers premises) is a precondition.

We therefore recommend to our clients to analyze the potential effects of a blackout together with our experts in the course of a mutual risk dialog and to adapt the necessary insurance cover to the respective demand as best as possible.

Of course, well-functioning risk management also plays a decisive role in dealing with service interruptions due to longer-lasting power failures. Blackout scenarios should therefore also be taken into account in the emergency and business continuity management plans and appropriate preventive measures should be established so that consequential damage, such as the failure of critical cooling systems, will not occur and potential business interruption loss is limited as far as possible. Our risk engineers from GrECo Risk Engineering GmbH are also happy to provide further information and advice on risk and business continuity management in case of a blackout.

Related Insights