For the 31st consecutive year, The University of Alabama’s Office of Media Relations offers predictions from faculty experts for the coming year.
The United States was particularly hard hit with a string of natural disasters in the past year: unprecedented summer heat and drought in the Southwest, deadly tornadoes, a massive blizzard in the Northeast, major river floods in the Midwest, an earthquake on the East Coast followed by a hurricane that caused massive flooding.
There also were a record number of wildfires in the Southwest and strong windstorms in Southern California to end the year.
So we can expect municipalities around the nation to look for ways to mitigate losses caused by natural disasters.
“The U.S. can no longer afford to ignore the management of catastrophic losses at the state and federal levels,” said Dr. William Rabel, professor of finance and head of the insurance program at The University of Alabama’s Culverhouse College of Commerce.
“Instead of rushing in to tape over losses once they have occurred, both the states and the federal government will have to implement all the tools in the risk-management process. They will have to identify and evaluate exposures and then select the optimum tools for controlling and financing losses.
“As a society, we can no longer afford to ignore the fact that often loss prevention and reduction are much more efficient than trying to rebuild,” Rabel says. “Every state and the federal government will need a chief risk officer.”