Natural Hazard Risk Management for Multinational Conglomerate
Read how ABS Group helped a multinational conglomerate quantify, manage and reduce Natural Hazard Risk exposure across their global portfolio.
Develop and implement a Natural Hazard Risk Management Program
Determine and rank the physical natural hazard exposure at selected sites
Quantify the natural hazard exposure from a financial and physical vulnerability perspective
Track and report progress to senior management
During an internal evaluation, a multinational conglomerate identified that it did not have a structured process for managing its natural hazard risk exposure. This evaluation followed a period where several insurance claims had been filed as a result of natural hazard events. The conglomerate’s insurance department recognized the need for a truly independent consultancy to quantify, manage and help to reduce the natural hazard risk exposure across its global portfolio.
ABS Group was selected by the conglomerate to begin a rolling natural hazard risk management program to quantify the exposure and provide recommendations to reduce the risk at individual locations through a series of on-site audits, desktop assessments and other key initiatives.
Now in its eighth year, the program has helped the conglomerate to quantify the exposure at over 100 locations and to begin to reduce this exposure through the completion of recommendations made during the on-site audits. ABS Group helps to manage the program through a dedicated online tool that tracks recommendation completion and reports progress to senior management within the conglomerate.
- Quantify the natural hazard exposure at individual locations
- Manage natural hazard exposure across the global portfolio
- Identify and reduce vulnerabilities at individual locations through on-site audits
- Track progress, improvement and compliance using corporate standards
1- Develop a Natural Hazard Risk Management Program
To address the needs of the client, ABS Group's Extreme Loads and Structural Risk (ELSR) division developed a comprehensive Natural Hazard Risk Management Program to assess and quantify the exposure at multiple facilities per year. The assessments use a combination of desktop and on-site elements to quantify both the financial and physical exposure at the individual locations.
2- Quantification and Identification of Natural Hazard Risk
A total of 14 perils were assessed for each location and categorized as either a high, moderate or low hazard. The categorization was based on accepted definitions provided to the client by ABS Group. The engineering team performed the natural hazard assessment used local building codes, industry-standard sources and tools, government documents and in-house databases.
3- Perform On-Site Audits
On-site audits were performed with a focus on high and moderate hazards. The facility audit enabled an assessment of the vulnerability of the structures, installed equipment and stock. It also enabled meetings with on-site management to identify potential supply issues, both internal and external, for the location and a review of existing mitigation measures, including emergency response plans and business continuity plans.
Recommendations were made to address observed vulnerabilities or shortfalls in terms of compliance with the client’s internal standards and the potential financial losses were quantified for the location.
4- Monitor Tracking and Progress
ABS Group tracked the status of the recommendations made during the on-site audits and reported progress to senior management through quarterly reports. This enabled the client to:
- Easily monitor program progress
- Identify non-compliance with internal standards
- Effectively communicate risk levels and progress at the Board level
Our solution has enabled the multinational conglomerate to re-quantify its exposure to natural hazards and to increase awareness throughout the organization as to how natural hazards can result in significant property damage and business interruption at local, regional and global levels due to the interdependencies within major global organizations.