Best's Review



Risk Adviser
Lessons Learned

The damage caused by Hurricane Maria to Puerto Rico can help build a bridge to resilience.
  • Paul Horgan
  • August 2018
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Paul Horgan

Paul Horgan

The damage caused by Hurricane Maria to Puerto Rico can help build a bridge to resilience.

Nearly a year after hurricanes Irma and Maria tore through Puerto Rico, the island still struggles to recover from the storms. The number of lives lost and the amount of property damaged place these storms among the most severe weather events in U.S. history.

Puerto Rico’s infrastructure was already in need of repair before Hurricane Maria arrived packing sustained winds in excess of 150 mph. Roads, bridges, water systems and other critical infrastructure were severely damaged. The entire island lost all electrical power, slowing the recovery.

In April 2018, Zurich convened a multidisciplinary group in Puerto Rico to evaluate how best to rebuild the infrastructure there and to discuss ideas for making infrastructure improvements across the rest of the United States. We went to Puerto Rico because the situation there provided a clear example of what is happening across the country—insufficient investment has led to deteriorating roads, bridges, canals, levees and other key infrastructure elements.

The lack of investment in U.S. infrastructure not only impacts the quality of life for individuals, it has a major economic impact on businesses. The American Society of Civil Engineers estimates that by 2020 “aging and unreliable” infrastructure will cost American businesses $1.2 trillion.

Few would argue against the need for greater investment in America’s infrastructure. However, many are now beginning to acknowledge the need for upfront investment to build resilient power systems, bridges, roads and water systems that can withstand the increasing frequency and severity of the weather we face.

Immediately following a disaster, there is rarely time to think beyond recovery. We should spend time—and money—now to make sure the lights will stay on when the next disaster strikes.

Studies indicate that every dollar spent on more resilient construction of homes and commercial buildings following a storm will save four dollars in disaster response. Similar investment returns could be realized through improvements in infrastructure.

As a society, we need to provide incentives to rebuild to more resilient standards, or our infrastructure and our buildings will continue to suffer the same fates when the next big storm comes along.

The insurance industry has a key role to play in seeking sustainable solutions for infrastructure investment. We won’t be able to truly improve the infrastructure in the United States unless we encourage collaboration between all stakeholders and continue the conversation on investment. Those conversations need to include: government policy changes and incentives for front-end investment; increasing use of private investment, including more use of public-private partnerships (P3s); insurance claims that cover sustainable rebuilding; and, of course, changes related to publicly funding proactive resilience strategies.

All of these approaches to front-end sustainable investment can attract private investors who are looking for greater certainty of return on their investments.

It is not enough to understand the dynamics behind what is needed to address these shortcomings. We need to find real solutions and take action. 

Best’s Review contributor Paul Horgan, is head of North America Commercial Insurance, Zurich North America. He can be reached at

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