Published on September 29th, 2022, by Kyle Langan
As the nation holds Florida in its prayers, hoping the state and its people stay safe in the face of Hurricane Ian, our thoughts are with everyone impacted. A catastrophic loss can happen to anyone at any time; therefore, resilience is crucial. Fortunately for the areas and people stuck in Ian’s path of destruction, the United States is a resilient society. To ensure business and personal resilience, we must ask ourselves, do we view insurance as an asset or an expense?
What is meant by resilience?
Resilience means having features in place for the following: preparation, prevention, protection, response, and recovery after an accident or disaster.  For example, the “U.S. relies on the National Security Council to instill ideas and actions of resilience in their national prevention and action plan for a crisis scenario.”  The U.S. is also very advanced terms of economy and insurance penetration; there is sufficient capital in the U.S. to fund response and recovery to a disaster. 
A greater presence of insurance (higher insurance penetration) strengthens resilience
A place with a greater presence of insurance will be better able to withstand natural disasters like the recent Hurricane affecting Florida’s eastern coast.  With greater insurance penetration, comes a more resilient society.  Several economic studies in the last few years have shown that high insurance penetration assists a country’s economy after a major natural disaster.  The greater the proportion of insured losses, the less of a decline there will be in economic output following a natural disaster, and therefore the faster the country can recover.  In countries with very high insurance penetration, there can even be a positive effect on economic output. 
Risk reduction can also be achieved through managing exposure.  This includes cutting back on development in high-hazard regions such as coastlines or areas that are prone to flooding.  “This harbors enormous potential, but it is a potential that is often neglected in the pursuit of short-term gains, or because poorer people simply have no other places to live.”  A further component is reducing vulnerability.  For example, “the loss susceptibility of buildings can be reduced by enforcing stricter standards for more loss-resistant construction methods or by using more suitable building materials, while protection measures like dykes can help to reduce the risk for entire areas.”  After that come measures for acute catastrophe management, such as early-warning systems, evacuations and emergency aid.  These name just a few of the many ways societies, businesses, or individuals can practice preparation, prevention, protection, response, and recovery, therefore improving their resilience.
Höppe, P. (2017, March 9). Resilience: Munich re topics online. munichre.com. Retrieved September 15, 2022, from https://www.munichre.com/topics-online/en/climate-change-and-natural-disasters/resilience/resilience-more-than-just-a-buzzword.html