AXA XL Unveils Comprehensive Disaster Recovery Report by Cambridge Centre for Risk Studies

New usage-based policy enables businesses to meet surge in demand

Hamilton, Bermuda (Sept. 16, 2020) – AXA XL, in collaboration with the Centre for Risk Studies (“CCRS”) at Cambridge Judge Business School, has released a comprehensive report demonstrating the impact that (re)insurance has on the speed and quality of recovery following natural disasters.

The report, titled “Optimizing Disaster Recovery: The Role of Insurance Capital in Improving Economic Resilience”, also outlines the growing economic impact of natural disasters over the past three to four decades. It notes that annual average loss from such catastrophes rose from an average of USD 27 billion in 1970-1980 to nearly USD 200 billion in 2010-2019, driven by global economic development and the increasing value of assets in hazardous areas, particularly in fast-growing regions such as Southeast Asia.

Key findings of the report include:

  • Each percentage point increase in insurance penetration (non-life premiums divided by a country’s GDP) reduces recovery times by almost 12 months.
  • Events in countries with high insurance penetration (3% – 4% including in Western Europe, Japan, Australia, South Korea) have an average recovery rate of less than 12 months and events in countries with very low insurance penetration (Bangladesh, Haiti, Nepal, Philippines) have a recovery rate of more than 4 years.
  • The US is anomalous – the US enjoys very high insurance penetration (>4%) but the fragmented nature of coverage, particularly flood, disaster response and scale of loss has resulted in a recovery rate average of just over 3 years (e.g. Hurricanes Andrew (1992), Katrina (2005) and Sandy (2012), and the Great Mississippi and Missouri River Floods (1993)).
  • The quality of recovery for very high and high insurance penetration countries is better than pre-loss levels, and the reverse is true for countries with lower insurance penetration although the differences are quite small. There is potential for product development in terms of “building back better”.
  • Economic recovery is faster than societal recovery in almost 60% of the cases and is particularly pronounced in the first six months. The standouts are German flooding in 2013, with more than 600,000 affected and 80,000 displaced people recovering to economic and societal norms within 12 months, and Haiti suffering an earthquake in 2010 from which it has yet to recover.

Commenting on the report, AXA XL Reinsurance Chief Underwriting Officer Jonathan Gale, who spearheaded the report’s sponsorship and wrote the Foreword, said: “Putting communities impacted by disasters back on their feet as quickly as possible, and in a better state, is just one example of how we make AXA’s purpose to ‘act for Human Progress by protecting what matters’ a reality. The case for (re)insurance is clear but is seldom adequately explained. We wanted to bring out comparative information related to speed of recovery – how quickly employment and productivity returns to normal (economic) and how quickly people are back in their houses and power is restored (societal). We also wanted to focus on the quality of recovery, that is whether the post-disaster normal is better than the pre-disaster state in terms of the economy and the resilience of the community to future events from the perspective of infrastructure and economic resilience.

“This report shows pre-disaster financing (predominantly (re)insurance) with the ability to channel significant funds instantly and without recourse as the single biggest solution to catastrophic events.”

Professor of Operations Research at Cambridge Judge Business School and Academic Director of CCRS Daniel Ralph said: “This project provides much needed quantification of resilience and recovery after natural catastrophes, as much of the ‘evidence’ to date has only been anecdotal.  With climate change events, including floods and storms, increasing in frequency, it is more important than ever to understand the levers of recovery for communities and companies.

“The report looks mostly at vulnerable communities, but there also are clearly lessons for corporates in terms of preparing for catastrophe, investing in ways to recover more quickly, and more effective decision-making and implementation if disaster strikes.  Assessing the impact of surprises requires effort in delineating the kinds of surprises that are possible, and then stress testing your organisation across the gamut of those events – stress-testing via scenarios is the key to planning for surprise.”

AXA XL Reinsurance held a virtual media briefing event yesterday where CCRS Chief Scientist Andrew Coburn and Environmental & Climate Risk Lead Oliver Carpenter joined Andrew MacFarlane, who leads AXA XL’s Public Sector Partnership Working Group, in discussing and answering questions about the comprehensive report. The report is the culmination of a multiyear series of disaster recovery studies, as part of work to understand the insurance protection gap, undertaken by CCRS in collaboration with AXA XL Reinsurance over the past decade.

The next phase of AXA XL Reinsurance’s work with CCRS will involve developing an online database that will be accessible worldwide and contain the research to date and over time expanding the database with additional case studies and related information.

About AXA XL

AXA XL, the property & casualty and specialty risk division of AXA, provides insurance and risk management products and services for mid-sized companies through to large multinationals, and reinsurance solutions to insurance companies globally. We partner with those who move the world forward. To learn more, visit

AXA XL is a division of AXA Group providing products and services through three business groups: AXA XL Insurance, AXA XL Reinsurance, and AXA XL Risk Consulting.

About AXA XL Insurance

AXA XL Reinsurance is among the world’s leading reinsurers, offering solutions that include property, casualty and specialty reinsurance. Top insurers choose AXA XL Reinsurance to help them move the world forward. To learn more, visit

About Cambridge Centre for Risk Studies

Cambridge Centre for Risk Studies is a research centre of the University of Cambridge Judge Business School. CCRS works closely with business partners in tackling complex issues of management science in risk. To learn more, visit


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