Insurers writing protection for property and casualty losses need to plan for business continuity and disaster recovery (BC/DR) at several levels. From a basic actuarial approach, they need to calculate the risk of a particular event occurring in order to be able to meet claim payout demands. Their own operations need BC/DR plans to ensure they can quickly provide the help needed by policyholders in the event of an emergency.
But there’s a third aspect that could easily be overlooked and more catastrophic to an insurer’s bottom line: planning for disasters that happen outside the bounds of standard actuarial computation.
