By Dominic Jones, Everbridge Senior Vice President responsible for Business Development, Partners & Alliances,
Lorenzo Marchetti, Everbridge Senior Specialist Government & Public Affairs,
Laurent Sabatie, Skyline Partners Co-Founder & Executive Director.
As a Partner of World Climate Foundation, Everbridge will participate in World Climate Summit 2022. Dominic Jones, Senior Vice President of Business Development, Partners & Alliances will speak at the Panel Session "Mobilising Finance for Adaptation - Harnessing Untapped Potential" on 13 November in Sharm el-Sheikh.
“While Everbridge’s technology helps organisations prepare for and manage critical events, a major catastrophe requires capital to fund a comprehensive emergency response. Index-based insurance can mobilise that capital quickly and reliably. Bringing together these two critical components of resilience – public safety technology and insurance-based capital – can help prevent the loss of lives and infrastructure by facilitating a faster, more organised response and shortening the period of time between a major event occurring and people receiving needed services – thus expediting the recovery.”
- Dominic Jones, Everbridge Senior Vice President for Business Development
Mitigation is not enough to contend successfully with the reality of climate change. All organisations must adapt. Critical event management and parametric insurance are two key tactics that will help to ensure the safety of personnel and keep operations running during a catastrophe induced or exacerbated by climate change.
Critical event management (CEM) helps by providing the tools necessary to assess potential risk events, respond quickly when they occur, and automate data collection to improve processes for the future. Parametric insurance helps by providing rapid, flexible post-event funding which covers intangible as well as physical losses. When these tactics are combined, organisations can anticipate climate-related disasters, mitigate their impact, and benefit from quick access to funds for remediation and support.
Two companies have worked together to develop solutions that streamline climate-related disaster management though this combination.
Everbridge, the critical event management firm which supports thousands of businesses and governments worldwide.
Skyline Partners, the parametric insurance specialist focused on the creation and operation of parametric insurance products.
Working in tandem, Everbridge and Skyline assess organisations’ disaster readiness and resilience, plan and execute automated responses, and manage new ‘parametric’ insurance products which maximise organisations’ ability to adapt to climate change. Everbridge provides CEM, Skyline underwrites and administers parametric insurance policies, and an insurance or insurance broker provides risk consulting services while acting as intermediary and retailer.
Economic Impacts of Climate Change
Climate change is among today’s biggest long-term threats to organisations. In its 2022 report, the Intergovernmental Panel on Climate Change identified 127 risks in a very wide range of sectors, including health, agriculture, and infrastructure. As well as devastating lives and livelihoods, climate-related disasters result in substantial financial losses.
Catastrophes triggered by natural hazards now occur nearly five times more often than 40 years ago. They affected 1.7 billion people during the past decade, and cause $137 billion in economic loss every year. Inaction could cost the global economy $178 trillion over the next 50 years, according to analysis by Deloitte.
Organisations that act early to build climate resilience for the future gain competitive advantage and increased financial security in the present. For example, the Bank of England’s May 2022 climate stress testing report puts late-acting banks’ credit losses 30% higher than early adapters, emphasising the need to take steps now.
Two-Part Aligned Solutions
Organisations can improve their climate change resilience dramatically through a two-pronged approach.
First, a solution such as Everbridge’s Critical Event Management (CEM) platform collates intelligence to build preparedness which increases the speed and decisiveness of disaster response. As the Bank of England notes: “The inability to capture appropriate and robust data in certain areas is a common limitation, which means many climate risks are being only partially measured.” The inability to use data well to assess climate change risk is a challenge faced by organisations in all sectors.
Second, financial products such as Skyline Partners’ parametric insurances provide rapid liquidity following a disaster event. Parametric cover responds almost immediately, without the need for loss assessments and adjusters, to support emergency response efforts in the event of an insured catastrophe. The global law practice Clyde & Co explains: “The benefits of parametric insurance have been highlighted in the Caribbean Catastrophe Risk Insurance Facility’s response to hurricanes Irma and Maria, where the facility was able to pay out … within 14 days.”
This two-pronged approach is most effective when the two solutions are paired, such that the critical event management platform tracks the relevant data which triggers parametric insurance payments. They occur when the event parameters specified in the policy (such as sustained windspeed or temperature, or even a human event like a riot or shooting incident) occur in the area defined in the policy.
In combination, Everbridge’s technology, Skyline’s parametric insurance, and an insurance’s risk expertise allow organisations to manage the entire lifecycle of a catastrophic event. The solution begins with risk identification and response planning, moves through real-time event management, and concludes with post-event financing and response evaluation.
Critical Event Management Helps Adaptation
Time-consuming manual approaches to crisis response are outdated. Everbridge’s Critical Event Management (CEM) solutions protect people and assets through sophisticated, automated responses that keep revenue flowing.
With CEM, leaders assess risks and identify the most relevant in preparation for possible crises. During an event, all people and assets can be located in real time, including remote, on-site, mobile, and traveling employees, customers, and responders who are near or traveling towards areas of risk.
In response to the crisis and this intelligence, leaders may automate standard operating procedures, manage incident responses, analyse performance to identify bottlenecks, and improve response time for subsequent events.
Alternative Finance and Climate Adaptation
To address climate change, the Skyline and Everbridge solution unites CEM and parametric insurance to provide subscribers with technical capabilities and risk financing to support efficient management of emergency responses to catastrophic events. In tandem, they create a transparent risk management framework for climate resilience and catastrophic emergency response. In the event of disaster, organisational response is coordinated and informed. Emergency funds are released very quickly to help save lives and reduce economic losses.
Building Resilience
Combining critical event management and parametric risk financing adds enormous value to organisations working to adapt to the risks of climate change and other crises. Together, these solutions:
Initiate recovery and mitigate impact quickly by delivering necessary data and eliminating the need for loss evaluation or adjustment.
Provide capital quickly to meet internal needs or external regulatory requirements.
Provide safety and warranties according to organisations’ own protocols, in support of the emergency response.
Provide a framework to ensure the protection of customers and the continuity of operations.
Benefits of Parametric Insurance
Traditional insurance has many benefits but is not always suitable in emergencies since loss evaluation can lengthen response times dramatically. In contrast, parametric insurance pays a specified sum in the event of the occurrence of a specific, binary event, leaves no room for judgement of cause, and requires no assessment of actual loss values. Therefore, the agreed claim amount can be paid immediately, typically after the insurer notifies the insured organisation that a claim can be made.
Further, since some events cause intangible losses such as a surge in operational costs, loss of opportunity and value, supply chain disruption, or reputational damage, as well as the physical loss-costs covered by traditional insurances, parametric coverage can be crucial to an insured organisation’s survival.
Finally, parametric insurance is priced according to the likelihood of an event occurrence, rather than the vulnerability of a specific insured organisation. That difference – alongside the elimination of claims adjustment costs – means that parametric insurances are typically significantly cheaper than conventional insurance for each dollar of protection provided.
Claims Under Conventional vs. Parametric Insurance
Parametric insurance cannot reduce the risks of climate change, but it can provide protection against the losses – intangible and physical – associated with them. Parametric cover reduces the financial impact of:
business interruption
loss of attraction
loss of access
loss of profits
reputational damage, and
other intangible losses
as well as losses covered by traditional insurance policies, such as disaster response costs, loss of assets, or damage to facilities or production assets arising from a climate-change-related loss event.
Time to Act
Building resilience against climate risk is no longer optional. Now is the time for governments and enterprises to act. Leaders in all sectors must adapt to the changing environment by improving the ways they protect their people, assets, and economies against various climate- and socio-economic-related risks.
By investing in a two-part aligned solution combining critical event management and alternative finance, organisational leaders are adapting proactively to climate change by increasing their resilience and reducing their financial exposure to climate-related events.
About Everbridge
Everbridge, Inc. (NASDAQ: EVBG) is a global software company that helps companies and public sector authorities anticipate, respond, and adapt to risk by centralizing business intelligence, communications, and crisis management. Our Critical Event Management (CEM) software solutions are trusted by over 6,200 customers across 76 countries, and over 23 national disaster prevention authorities use the Everbridge Public Warning Center to alert their populations. In addition to direct customer sales, and referrals, Everbridge goes to market via qualified partners to broaden our distribution and reach. Through market-leading solutions and the Everbridge Partner Program, we can grow our mutual business together and keep people safe.
Learn more: www.everbridge.com
About the authors
Dominic Jones – Everbridge Senior Vice President responsible for Business Development, Partners & Alliances
Dominic Jones is the Senior Vice President responsible for Business Development, Partners & Alliances for Everbridge. In this role he is responsible for managing strategic and corporate development opportunities, and the Partner and Alliances program for the Company. While at Everbridge, Dominic has also focused on the development of programs and partnerships to enhance the climate adaptation strategy of enterprises and institutions. Dominic joined Everbridge from Synchronoss where he was SVP of Corporate Strategy and Partnerships. He has a cross-sector experience in Finance, Telecoms, Media and Technology, Energy and Autonomous Vehicles.
Lorenzo Marchetti – Everbridge Senior Specialist Government & Public Affairs
Lorenzo is a Sr. Public & Government Affairs Specialist at Everbridge. In this role he focuses on shaping the external policy environment across key target countries, starting from EMEA, and gradually expanding to all international regions (EMEA, APAC, LATAM) to support the growth of Everbridge Public Safety and CEM businesses. Since his arrival at Everbridge, he has contributed to programs that aim at positioning the company as a key technological solutions provider in the field of climate resilience.
Laurent Sabatie – Skyline Partners Co-Founder & Executive Director
Laurent is a qualified actuary with over 15 years of senior management experience in the insurance market, in London and Europe including at Lloyd’s of London. Previous roles include: Chief Actuary of ProSight Lloyd's Managing Agency, Syndicate 1110; Head of Capital Model Calibration – AIG (London); and various actuarial roles at AIG and AXA (Paris). Laurent co-founded Skyline in 2017 and has played a key role in developing Skyline’s parametric technology platform INSDEX and its analytical capabilities.