Swiss Re’s Alex Kaplan on the reinsurer’s part as a founding member of the Rockefeller funded 100 Resilient Cities project

Alex Kaplan

Acknowledging the eventuality of a crisis is the first step towards resilience.

Acknowledging the increasing severity of a risk bestows great responsibility on those who are informed, according to Swiss Re senior client manager vice-president global partnerships, Alex Kaplan.

Kaplan (pictured) takes part in the 100 Resilient Cities project, an initiative funded by the Rockefeller Foundation, of which Swiss Re is a founding member.

The project aims to improve the resilience of 100 cities worldwide by bringing together community leaders to discuss their vulnerabilities, share challenges and solutions from city to city and offer expertise to guide and advise each city’s newly appointed chief resilience officer.

The motivation and rationale behind the project stems from the pace at which the earth’s population is growing. Moreover, according to the UN, 68% of the world’s population will live in cities by 2050 and almost 65% of the space necessary for this growth has not yet been developed.

“There is this incredible accumulation of assets and wealth in the most disaster-prone areas. The shocks and stresses that these urban centres will face will only grow exponentially and the effect has on the broader national economies will be even greater,” Kaplan said.

The first 32 cities of the project were chosen in December 2013, with the next selection expected to be announced towards the end of the year. The intentional staggering of the selection process is an example of the thought and planning that has gone into the project, according to Kaplan.

“There’s a ramp-up phase so we can learn from what we have seen and then adapt. The [Rockefeller Foundation] is not naming 100 cities right away and then jumping in head first, it is doing it in tranches so we can see the development and then take a step back and analyse what we are doing right or wrong.”

An integral role within the project is that of the chief resilience officer. Each city will appoint one, whose salary will be paid by the Rockefeller Foundation for the first two years of the project.

The chief resilience officer will work on an all-encompassing risk basis, tying together expertise and specialist guidance across the board to ensure their city is continually moving towards greater resilience.

As a founding member and partner to 100 Resilient Cities, Swiss Re will work together with the chief resilience officers to help identify risk and implement effective strategies to improve resilience.

“Swiss Re decided to take a more proactive role in partnering with governments to determine ways they can transfer and reduce their contingent liabilities from the taxpayer and into the private market.

“We analysed what governments have done historically to pay for disasters such as raising taxes, raising budgets, shifting money away from other important priorities to rebuild or they go to the capital markets and issue debt. We believe those are relatively inefficient ways of paying for events that are bound to happen.

“Swiss Re had discussed the fact that corporations have chief risk officers, so why don’t governments have the same? Somebody who can work across all layers of government, break down the silos and identify in a holistic fashion the risks, exposures and how to tackle them and prioritise our solutions.

“The goal is to help the selected cities identify and manage their exposures in the long term and develop a resilient strategy they can implement,” Kaplan said.

The risks in question include everything from poor infrastructure to natural catastrophe, but Kaplan believes local and national governments have traditionally not applied suitable economic strategies to cope with the unavoidable crises that have affected our cities.

“Traditionally, cities and sustainability or emergency managers think about physical and social resilience of the population but what they are not thinking about is economic resilience. What is the cost of inaction? What are we going to be forgoing in the future as a result of not putting in place proper mechanisms?”