Last year, there were devastating bushfires, in 2020, the turmoil produced by the COVID-19 pandemic and in 2021, La Nina.
While La Nina has not translated into wet conditions over the spring season, businesses should still be vigilant over the coming months. A Niña is a phenomenon associated with cooler sea surface temperature anomalies in the equatorial East Pacific region. The phrases La Niña and its opposite El Niño – which is associated with a drier climate – were coined by Peruvian fishermen who first spotted these phenomena in South America long before modern science and instrumentation caught up.
“Simplistically, a La Niña event translates into wetter conditions for Eastern Australia, but dryer conditions on the opposite side of the Pacific,” says Dr Alexander Pui, Head of Nat Cat and Sustainability (APAC) at Swiss Re Corporate Solutions.
But he says, a single La Niña event does not absolutely guarantee increased rainfall and more damaging floods and cyclones, although there was an increased risk of these perils during previous La Ninas.
“A Niña is a phenomenon associated with cooler sea surface temperature anomalies in the equatorial East Pacific region”
Although the current La Niña has yet to produce significant rainfall events to date, Pui says it’s important to consider other climate modes rather than La Nina in isolation. “Australia is flanked by the Indian Ocean to the west, the Southern Ocean to the south and the Pacific Ocean to the east. So, we need to look at how climate drivers from each ocean are taking hold.” For now, there is no ‘reinforcing’ support from the Indian Ocean dipole (IOD), which is in neutral, and the Southern Annular Mode (SAM) has also yet to swing positive.
Nevertheless, the La Niña weather pattern, which peaks at about Christmas, is typically a major factor in seasonal climate forecasting because its impacts are significant and its longer lead time in predictability.
“Normally we start to see La Niña manifest from September or October. But that hasn’t happened due to more localised climate drivers. It’s been really warm across most of Australia over the past few months and dry as well. But we expect that dry weather to stop and give way to more rain-producing events. It’s a big call, but I don’t see a repeat of the 2010/11 La Niña event that resulted in the Brisbane floods this season, just because soil antecedent conditions are much dryer compared to that event – however that does not exclude more localised flash flood events”, Pui adds.
Understanding La Niña’s consequences
Based on analysis of Insurance Council of Australia claims data, a La Niña year is significantly more costly in terms of insurance events compared to a neutral year, and also more expensive than an El Nino year. For small businesses, this means it’s essential to be ready.
Says Pui: “Just because it appears that this La Niña has not produced increased storm activity to date, that doesn’t mean they won’t happen and it’s essential to be properly equipped. Businesses that tend to be less prepared are the ones that have not experienced a natural disaster before and assume it won’t happen to them. For this reason, they are most at risk.”
Counterintuitively, businesses located in areas that have previously experienced cyclones are often less exposed – with Port Hedland and much of the Pilbara coast being case in point. This is because it’s likely construction standards were improved as a result of the previous catastrophe, making buildings more able to weather bad storms versus areas that have not faced similar tempests.
“Businesses in areas such as Cairns or Port Douglas tend to be more well-built because they are known cyclone landing areas. But businesses in places not as far north such as Bundaberg and further south may be more exposed,” he adds.
With cyclones expected to migrate further south in the east coast to hit places such as the Gold Coast in the future due to climate change, the message to businesses in these areas is get ready. Here are some steps businesses can take to do this:
- Identify your risks
Look at the Insurance Council of Australia data globe, which is free and open source. Check whether your property is in a flood zone.
- Mitigate your risks
Check and fix roofs, place stock and electrical equipment above the ground floor and install a pump in the basement. “Encourage other local businesses to take similar steps, because if everyone does it the community recovers faster,” says Pui.
- Check your insurance policy
Don’t assume you’re covered for flood, rain or storm water damage. Clarify how much cover you have with your broker.
Governments and local authorities also have a role to play. They have a responsibility to be aware of the latest science on seasonal forecasts of rainfalls and reservoir management. Undertaking state emergency drills also helps communities to be ready for major weather events.
“It will be harder to prepare for natural catastrophes with the current COVID focus, and restrictions. However, we can ill afford to disregard the real risk of natural catastrophe at a time when societal resilience is already being challenged. Governments and businesses have to make sure they are ready,” he adds.
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