Study: finance execs have a 'what, me worry?' Attitude toward disasters.

• Author: Heffes, Ellen M.
• Position: BUSINESS CONTINUITY

In the first half of this year, there were about 400 natural catastrophes worldwide, with overall losses expected to top $50 billion. Yet, according to a study of 100 financial executives of U.S.-based companies with at least $1 billion in annual revenue -- 96 percent of which have operations exposed to natural catastrophes -- less than 20 percent of the firms said they were "very concerned," about such disasters negatively impacting their bottom line.

The 2008 Natural Disaster Business Risk Study, commissioned by business-property insurer FM Global, revealed a consistent disconnect across three of the most common and costly types of natural disasters: hurricanes, floods and earthquakes.

"The findings reveal a surprising and concerning gap between the levels of natural catastrophe exposure among North America's largest companies and their level of preparedness," said Ruud Bosman, executive vice president of FM Global, in a press release.

Companies may believe that insurance can fully protect them from disaster -- even from its intangible consequences, continues Bosman. "But they may overestimate their level of preparedness and underestimate the extent to which their natural catastrophe exposures put their organization's supply chain at risk."

Factors related to the disconnect across three common and costly types of natural disasters include:

Hurricanes: Though 80 percent of companies have North American operations located in regions exposed to hurricanes, nearly 50 percent said they are not well-prepared for such a disaster. And, nearly 80...