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Best Practices
Natural Disasters Action Plan
MODERATORS:
Jeannie Chiaromonte, CAR
Vice President / National Remarketing Manager
Bank of America
Chuck Novince, CAR
Vice President National Accounts
Manheim Corporate
The National Corvette
Museum
Sinkhole Disaster
Feb, 2014
Flood
Flash flooding is the
leading cause of
weather-related deaths
in the U.S. -
approximately 200
deaths per year
Over 50% of flood-
related drowning are
vehicle related
• U.S. Flood Insurance Loss Statistics Jan 1, 1978 through Sep 30, 2001:
• RankingTotal Payments
• 1. Texas $2,249,450,933.34
• 2. Louisiana $1,542,959,989.27
• 3. Florida $1,479,585,524.19
• 4. New Jersey $577,019,343.82
• 5. North Carolina $550,946,543.87
• 6. South Carolina $414,951,356.42
• 7. Missouri $407,742,372.26
• 8. New York $360,534,936.08
• 9. California $353,244,485.27
• 10. Pennsylvania $313,186,521.60
Tornadoes
How many tornadoes hit the U.S.
yearly?
Tornado reporting methods have changed a lot in the last several
decades, so the officially recorded tornadoes are believed to be
incomplete. Although the actual average is unknown, recent
trends indicate the number is around 1,300.
Hurricane
Hurricane Activity Saffir/Simpson category
1851-2012
AREA CATEGORY Major
1 2 3 4 5 ALL Hurricanes
U.S. Coastline 117 76 76 18 3 290 97
(Texas to Maine)
Texas 25 19 12 7 0 63 19
North 13 8 3 4 0 28 7
Central 7 5 2 2 0 16 4
South 10 5 7 1 0 23 8
Louisiana 19 15 15 4 1 54 20
Mississippi 2 5 8 0 1 16 9
Alabama 12 5 6 0 0 23 6
Florida 44 33 29 6 2 114 37
Northwest 27 16 12 0 0 55 12
Northeast 13 8 1 0 0 22 1
Southwest 16 8 7 4 1 36 12
Southeast 13 13 11 3 1 41 15
Earthquakes
Earthquakes in the United States for
2000 - 2012 Magnitude 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
8.0 to 9.9 0 0 0 0 0 0 0 0 0 0 0 0 0
7.0 to 7.9 0 1 1 2 0 1 0 1 0 0 1 1 0
6.0 to 6.9 6 5 4 7 2 4 7 9 9 4 8 3 5
5.0 to 5.9 63 41 63 54 25 47 51 72 85 58 89 51 27
4.0 to 4.9 281 290 536 541 284 345 346 366 432 288 631 347 271
3.0 to 3.9 917 842 1535 1303 1362 1475 1213 1137 1486 1492 3584 1838 1236
2.0 to 2.9 660 646 1228 704 1336 1738 1145 1173 1573 2379 4132 2941 2251
1.0 to 1.9 0 2 2 2 1 2 7 11 13 26 39 47 43
0.1 to 0.9 0 0 0 0 0 0 1 0 0 1 0 1 0
No
Magnitude 415 434 507 333 540 73 13 22 20 14 12 8 3
Total 2342 2261 3876 2946 3550 3685 2783 2791 3618 4262 8496 *5237 *3836
Estimated
Deaths 0 0 0 2 0 0 0 0 0 0 0 0 0
Snow storm
During the southern hemisphere winter of 1983, temperatures
at Russia's Vostok research station in Antarctica plunged to a
frighteningly cold minus 128.6 degrees Fahrenheit, which is
54 degrees colder than the winter average there and the
coldest temperature ever recorded on Earth.
How Bad Can It Be????
For comparison, the coldest temperature ever recorded in
the lower-48 United States was minus 70 degrees F (-57
degrees C) at Rogers Pass, Mont., on Jan. 20, 1954.
Hailstorm
National Hail Statistics
2012
• There were 7,031 major hail storms in 2012, according to
statistics culled from NOAA's Severe Storms database, with
the largest number of severe hail storms occurring in May
(1,689 storms), March (1,146 storms), and April (1,053
storms). Texas had the largest number of severe hail events
in 2012, followed by Kansas, Nebraska, North Carolina, and
Oklahoma.
• Damage caused by wind and hail cost State Farm and its
policyholders more than $3.9 billion in 2012, according to
an April 2013 analysis by the insurer.
How Far Would You Be Willing
To Go For Your Customer?
Goals
Develop a Disaster Recovery Business
Continuity Plan: – Maintain Critical Business Operations – continue business as
normally and quickly as possible
– Protect Market Position – a wounded business is vulnerable to
competition.
– Protect Customer Relationships – constant communication with
customers is essential to maintain strong relationships. If the
customer is aware of the recovery progress and is given access to
the recovery status, they will be less likely to begin looking
elsewhere.
– Preserve Financial Image – outstanding performance during and
after a crisis can enhance future customer opinion of management
skill.
Focus (Indentify / Plan / Respond / Recover)
• Identifying Risk
– Common weather exposures, while others such as proximity to airport,
rail spurs, or chemical plants are unique. Lane accidents are unique to
the auto auction industry.
• Preparing a Plan
– Detailing policies and procedures that should be followed in the event of
property damage or life threatening conditions to those at the auction.
• Emergency Response
– Plan to heed warnings, take action on protecting persons and property
and assessing damage
• Business Recovery
– Short and long term operations during the period of restoration
• Advance notice of potential event • Protect people • Protect property
• Evacuation • Accounting for persons • Preventing injury • First Aid
• Damage assess • Mitigation • Estimate impact
• Interim operations • Repairs • Restoration
• Ongoing operations • Resumption of impacted operations
(Hours-Days) (Days-Weeks) (Weeks-Months)
$ $
COST TO RECOVER
Disaster Stages
Warning Life-Safety Damage
Assessment Short-Term Long-Term
Emergency Response Business Recovery
Event Timeline
Page | 20
Disaster Recovery
• KISS – Method
• Make sure key personnel have specific jobs
• Five Recommended Teams
1) Recovery Management
2) Damage Assessment
3) Temporary Operations
4) Asset Replacement
5) External Affairs
CONSIGNORS BUSINESS CONTINUITY PLAN
Contractual Standard:
Vendor has business continuity plan in place according to contractual
standards
Validation:
• Review vendor’s business continuity plan ensuring it is updated
periodically (including current Business Licenses and Insurance
Certificates)
• Confirm test of the plan occurs
Evidence:
• Obtain copy of vendor’s business continuity plan
• Obtain results of most recent test of the plan
Q & A
Michael J. Rohdy Area Sr. Vice President
Arthur J. Gallagher Risk Management Services, Inc.
Mike Roy Area Vice President
Arthur J. Gallagher Risk Management Services, Inc.
A Special Thanks To:
