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Thursday, October 6, 2022

PERSPECTIVE: Rethinking FEMA’s Relationship with Insurers

As part of HSToday’s commitment to share ideas and insights on the future of the homeland security community, here is Part 4 of HSToday Editor at Large Rich Cooper’s take on what comes after FEMA Administrator Brock Long said the system is broken. (Read Part 2 here and Part 3 here.)

Giving Insurers a Bigger Role and Resetting FEMA’s Boundaries: No one knows more about risk and all its forms, costs and consequences than the insurance industry. Furthermore, no industry can change behavior faster than them, either. In their world, risk and money talk because it is what they balance for a living. With that type of experience and knowledge out there, bringing that type of expertise to the emergency management community table for planning, preparing and preventing hazards in all their forms seems like a no-brainer to me.

Are there legal, ethical and other sticky issues with putting insurers into the mix of how FEMA and the emergency management community are “rebooted” for the future? Absolutely! But I would never want anyone to say “we can’t do that!” and quote book-and-verse reasons why we should prevent anyone from engaging and accessing the most deeply informed, experienced and knowledgeable constituency on the planet.

Insurers are vested in so many ways in these decisions and finding a way to get them to the discussion table is essential. No community is smarter or more informed about risk than they are, and we need them at the discussion table to better shape and inform those decisions.

But as important as it is to increase the role and voice of the insurance community to shaping and informing our decisions, so too is knowing which roles and boundaries FEMA and others ought to possess.

FEMA already has an enormous amount of responsibilities on its plate. All of which are complex, cumbersome and involve an incredible array of public, private and NGO stakeholders and requirements. But as often is the case, when you have that many things to do, it’s not unusual for a lot more to be added to your “to do” list.

In this case, FEMA, which has the statutory authority to be America’s “Bad Day Manager” for coordinating response and recovery efforts with federal, state, local NGO and private-sector stakeholders, is also responsible for the management and administration of the National Flood Insurance Program (NFIP).

The coverage that NFIP has provided to its policyholders has been an economic lifesaver for many homeowners and businesses, but it has not been without its challenges. Prior to the devastating hurricanes of 2017, NFIP was more than $24 billion in debt. That debt number has only mushroomed following the destruction brought by Hurricanes Harvey, Irma and Maria this past year. Couple that debt number with the fact just over 40 percent of the American population lives near our coastlines – that is 130 million Americans potentially affected by floodwaters and their after-effects.

While there is much FEMA can to do warn and prepare residents and communities for floodwaters, charging it with running a public insurance program, especially when it does not provide insurance for other types of hazards such as fires, earthquakes, etc., is mission creep.

Having a flood insurance program is a good, sound and worthy investment, but having FEMA take it on when its mission assignments and responsibilities are Herculean enough is a burden that should be passed to someone else to manage.

Applying Analytics: There is no crystal ball, Magic 8-Ball, or all-knowing oracle that can ever accurately predict when or where an emergency might occur. But analytics is probably the sharpest and most informative tool available today to forecast risks, their impacts and costs available to us. Being able to model disaster events, costs, recovery, impacts and more provides greater insight than simply guessing or relying on a hunch as to what might happen.

When you look at all the available data on a particular area and study it with fresh tools and insights, you will often see patterns and details that might have been overlooked or gone unrecognized. Once those insights are revealed, a bigger story begins to unfold that can better inform and inspire decision-makers to take appropriate steps to provide greater value and offer means to mitigate against those risks.

In the world of FEMA and emergency management, if you apply these steps to mitigating risk, you can save lives, enhance value, produce savings, improve resilience, and better identify vulnerabilities.

When you combine the legacy data that comes from previous emergency events and history with other source materials from sensors, applications, experts, statistics and more, today’s emergency managers can produce better models and a clearer picture to forecast prospective impacts and costs. Those are tools that enable bigger aperture decision-making because it allows you to see the larger picture based upon more facts and details and not just legacy hunches and gut instincts.

Knowing how the dominoes may fall and the implications of what may happen when they tumble cannot only inform and shape mitigation strategies and investments, but also allow for even more enhanced planning and pre-deployment of assets and other solutions to begin response and recovery efforts even sooner.

Analytics has already revolutionized every other industry and application on the planet from baseball to healthcare. It can and should do the same for FEMA and emergency management.

The views expressed here are the writer’s and are not necessarily endorsed by Homeland Security Today, which welcomes a broad range of viewpoints in support of securing our homeland. To submit a piece for consideration, email HSTodayMag@GTSCoalition.com. Our editorial guidelines can be found here.

Rich Cooper
Rich Cooper is Editor-at-Large for HSToday. A former senior member of DHS’ Private Sector Office (PSO), Cooper has been a frequent writer and contributor to numerous media outlets. He is Vice President for Strategic Communications & Outreach for the Space Foundation and a Principal with Catalyst Partners, LLC. Cooper is also a former Senior Fellow with GWU’s Cyber and Homeland Security Institute and has also served in senior positions at NASA, the US Chamber of Commerce Foundation, SAS and several other profit and not-for-profit enterprises.

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