Contingencies Online - July/August 2011

Inside Track LINDA MALLON
No Man Is an Island
I AM OLD ENOUGH TO REMEMBER THE MARCH 1979 NUCLEAR ACCIDENT AT THREE MILE ISLAND.
At the time, I was working at a newspaper in upstate New York—not far from the Pennsylvania border
and too close for comfort.

There are many lessons to be learned from Japan’s hard expe-
rience. In his article on Page 18, structural engineer Chris Poland
writes that our understanding of major earthquakes and their con-
sequences remains a work in progress. Poland, whose firm has
been called in to assess seismic damage all over the world—most
recently in New Zealand—draws some interesting conclusions as
he compares the preparedness levels of different countries. How
does the U.S. stack up in Poland’s analysis? Not a total fail—but if
a major earthquake the size of the March 11 To–hoku earthquake
were to hit the United States, Poland believes we wouldn’t fare as
well as Japan. We clearly need to be doing more to mitigate our
risk from earthquakes and other natural disasters. (That’s why the
actuarial profession was invented.)
Shawna Ackerman, an actuary for the California Earthquake
Authority and co-chairperson of the Academy’s P/C Extreme
Events Committee, considers complacency to be a serious risk
factor when it comes to preparing for natural disasters. In an in-
terview that begins on Page 24, Ackerman details the great strides
that California and other earthquake-prone states have made in
preparing for and mitigating the effects of seismic events. Still,
Ackerman says, many residents living in these areas are overly
relaxed about the risks they face
in the event of a big one.
Complacency can be a risk
in other areas of life. As Curtis
Huntington, a member of the
Actuarial Board for Counsel-
ing and Discipline, points out
in his Up to Code article on
Page 14, actuaries who fail to
keep up with international ac-
tivity in the profession do so at
their own peril.
As federal, state, and industry officials scrambled to control
both the reactor and the public relations meltdown, I was struck
by the outpouring of sympathy that flowed to those living in the
shadow of the cooling towers. I remember particularly a news-
wire photograph of a young woman at an anti-nuclear rally in
Germany holding up a sign that read: “We are all Pennsylvanians.”
As I write this in late May (and even, I suspect, as you read
it in early July), the Japanese are still picking up the pieces of
lives that were shattered by the March 11 To–hoku earthquake
and ensuing tsunami. According to the global catastrophe mod-
eling firm Eqecat, an estimated 250,000 Japanese have been
left without housing because of the earthquake, tsunami, and
forced evacuations from around the Fukushima nuclear power
plants. Some 28,000 people are dead or missing, and more than
50,000 structures are totally or
severely damaged.
In 2011, we are all Japa-
nese. Not just because we
sympathize with the belea-
guered citizens of that island
nation or because post-ca-
tastrophe disruptions in the

Japanese economy inevita-
bly will have an effect on the
global economy, but also be-
cause the threat of some form
of natural catastrophe (flood,
tornado, wildfire, earthquake, tsunami, hurricane, or bliz-
zard, depending on where you live) hovers over all of us.
(That’s why insurance was invented.)
Huntington argues that
even if your job doesn’t take you across state lines, you need to
anticipate that you might be practicing internationally. Under
the Code of Professional Conduct, U.S. actuaries are required
to follow the practice standards of all applicable jurisdictions.
To do that, Huntington writes, you need to be aware of those
jurisdictions and of any standards that might apply to the
work that you are doing.
That’s good advice—and it cuts across all walks of life.
When it comes to preparedness and professionalism, we are
all actuaries.
BENTHOMAS PHOTO/ ISTOCK, BONOTOM STUDIO