lessons from hurricane sandy · storm history: hurricane sandy • october 29: sandy turns...
TRANSCRIPT
LESSONS FROM HURRICANE SANDY
Mark Bove, CPCU, ARe Senior Research Meteorologist IMUA Annual Meeting 21 May 2013
Source: NASA
Agenda
• Hurricane Sandy
• Storm History
• Why did Sandy become a “Superstorm”?
• Storm Impacts
• Wind
• Precipitation
• Storm Surge
• Underwriting & Catastrophe Modeling Lessons
• Application of Hurricane Deductibles
• Accuracy of Surge Modeling
• Flood Exposure Data
• Location of Contents
• Marine Exposures
Hurricane Sandy
Source: NASA
Storm History: Hurricane Sandy
• October 22: Tropical
Depression #18 is classified
in the south-central
Caribbean Sea. The
depression is upgraded later
that day, becoming Tropical
Storm Sandy, as it moved
slowly northward.
• October 24: Sandy begins a
period of rapid intensification.
Becomes Cat 1 hurricane
before landfall in eastern
Jamaica, then Cat 3 before
landfall over eastern Cuba.
So
urc
e: N
AS
A
So
urc
e: N
AS
A
Storm History: Hurricane Sandy
• October 25-26: Sandy exits
Cuba, then passes over the
eastern Bahamas. Weakens
back into Tropical Storm due
to wind shear but storm size
increases dramatically.
• October 27-28: Sandy moves
northeastward, hundreds of
miles off the Carolina coast.
Sandy regains hurricane
intensity.
So
urc
e: N
AS
A
So
urc
e: N
AS
A
Storm History: Hurricane Sandy
• October 29: Sandy turns
northward, then northwest.
Reaches a secondary
maximum intensity of 85 kts
(100 mph). Forward motion
also accelerates as storm
moves towards the coast. Wind
field continues to expand.
• Once over colder water, Sandy
starts to lose tropical
characteristics, becoming
“post-tropical” just before
landfall near Atlantic City, NJ.
So
urc
e: N
AS
A
6/13/2013 7 Title of presentation and name of speaker Source: NOAA
6/13/2013 8 Title of presentation and name of speaker
Hurricanes off the New Jersey Coastline, 1851 - 2011
6/13/2013 9 Title of presentation and name of speaker
Sandy’s Path
Source: NOAA
Why did Sandy Become a “Superstorm”?
• At landfall in New Jersey, Sandy possess some unusual path, size, and
hazard characteristics, leading the storm to be dubbed a “Superstorm”
by the media, including:
• West-northwestward motion into New Jersey coast
• Very large wind field
• Extreme storm surge in New York & New Jersey
• The term “Superstorm” is a creation of the media. There is no formal
meteorological meaning for this term.
• In meteorological terms, Hurricane Sandy completed a process known
as Extratropical Transition just before landfall. This resulted in the
National Hurricane Center classifying Sandy as “Post-Tropical”, which
means Sandy had become an extratropical cyclone.
Extratropical Cyclones
• Low pressure center colder than
surroundings (Cold-Core Low).
• Develop in areas of temperature
gradients between differing air masses.
• Asymmetrical Shape
• Strong upper-level winds critical in
development and intensification.
Understanding Extratropical Transition:
Types of Large-Scale Storms
So
urc
e: N
AS
A
Tropical Cyclones
• Low pressure center warmer than
surroundings (Warm-Core Low).
• Develop in air masses of relatively
constant temperature and humidity.
• Symmetrical shape.
• Weak upper-level winds aloft.
So
urc
e: N
AS
A
Understanding Extratropical Transition
Process of tropical cyclone becoming an extratropical (frontal) cyclone.
Usually induced when hurricanes interact with colder, drier air, jet
streams, or extratropical weather systems.
Floyd as Tropical Low Floyd as Transitioning Low
So
urc
e: N
AS
A
So
urc
e: N
AS
A
6/13/2013 13 Title of presentation and name of speaker Source: NOAA/NCEP
6/13/2013 14 Title of presentation and name of speaker
6/13/2013 15 Title of presentation and name of speaker Source: NASA
Sea Surface Temperatures, Late October 2012
6/13/2013 16 Title of presentation and name of speaker Source: NOAA
Source: NOAA
Why did Sandy turn West?
6/13/2013 18 Title of presentation and name of speaker Source: NOAA
Why did Sandy have such a large windfield?
Why was the storm surge so extreme?
Source: NOAA
Sandy Impacts
Source: Munich Re
Sandy Impacts - Overview
• Second largest insured loss in the United States due to a tropical cyclone
in terms of original dollar loss, $30 bn. (First: Katrina (2005), $60 bn)
• Estimated economic losses of $65 bn.
• Most damaging tropical cyclone in the Northeastern United States since
the 1938 Great New England Hurricane.
• Wind damage observed across 15 states & Canadian Maritime provinces
• Record storm surges along New York and New Jersey Coastlines
causing extensive damage.
• Power outages widespread across the region due to both wind and
surge.
• Major infrastructure damage in New York City.
Hurricane Sandy
Maximum 1-Minute Sustained Winds & Gusts
6/13/2013 22 Title of presentation and name of speaker Source: NOAA
Examples of Sandy Wind Damage
6/13/2013 23 Title of presentation and name of speaker Source: Munich Re
Examples of Sandy Wind Damage
6/13/2013 24 Title of presentation and name of speaker Source: Munich Re
Hurricane Sandy
Rainfall Totals
6/13/2013 25 Title of presentation and name of speaker Source: NOAA
Hurricane Sandy
Snowfall Totals
6/13/2013 26 Title of presentation and name of speaker Source: NOAA
Hurricane Sandy
Storm Surge (Height above ground level)
6/13/2013 27 Title of presentation and name of speaker Source: NOAA
Hurricane Sandy
Storm Surge Damage, Mantoloking, NJ
Source: NOAA
Hurricane Sandy
Storm Surge Damage
6/13/2013 29 Title of presentation and name of speaker
Hurricane Sandy
Storm Surge Damage
6/13/2013 30 Title of presentation and name of speaker Source: Munich Re
Hurricane Sandy
Storm Surge Damage
6/13/2013 31 Title of presentation and name of speaker Source: Munich Re
Underwriting and Cat Modeling Lessons From Sandy
Source: Carl Hedde / Used with Permission
Lessons from Sandy:
Hurricane Deductibles
• Designed to reduce insurance costs for consumers by requiring a higher
deductible for rare, but extreme loss events, like hurricanes.
• Each state can independently define how a hurricane deductible is
triggered in their state.
• “Named Storm” – Any storm named by the National Hurricane
Center
• Hurricane – Any storm classified as a hurricane at landfall by the
National Hurricane Center
• Variations: Only Cat 2 & Above, etc.
• Storm must make direct landfall over the state.
Lessons from Sandy:
Hurricane Deductibles
Source: State of New Jersey
Lessons from Sandy:
Hurricane Deductibles
• For two consecutive years, borderline-hurricane events have made
landfall in the northeast, but hurricane deductibles haven’t been allowed to
be applied.
• This means that the modeling assumption of using a hurricane
deductible for weak Cat 1 hurricanes or transitioning storms may be
incorrect.
• This practice artificially reduces the loss costs for portfolios because
the fire deductible isn’t used in the modeling.
• Currently, some models typically only accept one deductible type per peril.
• Do we ask for wind and fire deductibles in data submissions?
• For which storms in the event set should the fire deductible be used
with?
Lessons from Sandy:
Storm Surge Modeling
Flooded areas in New York
by hurricane category
(SSHS)
Category 1
Category 2
Category 3
Category 4
Source: Munich Re – Severe weather in North America, 2012
Surge is only partially
dependent on storm
intensity. Do the models
reflect that large surges
can be generated by
weaker hurricanes or
storms undergoing
transition?
Lessons from Sandy:
Flood Exposure Data
• There are no statistical inland flood models available for the United
States (coastal surge modeling exists), largely due to the fact that most
flood risks in the US are federally insured via the NFIP.
• Historically, there has been low demand by model clients to develop
these models.
• Developing an inland flood model would be a huge project, taking
modeling companies years to develop.
• As a result, the capturing of data for privately-insured flood risks in the
industry significantly lags data capture for other perils.
• Current modeling of flood risks for surge, when known, is also limited by
ability of models to handle flood sublimits and accurately determine
amount of flood damage that “leaks” into the wind policy claim.
Lessons from Sandy:
Location of Contents
• The location of contents within an insured location is critical when
assessing flood loss potential, particularly for commercial and industrial
risks.
• Examples:
• Hospitals (MRIs, CAT Scan Machines, Radiology equipment)
• Office Buildings (Electrical and IT equipment, etc.)
• Specialty businesses (Art Galleries)
• Models tend to spread out contents value over the number of stories
within a building. This could lead to an underestimation of the amount of
contents at risk to flood losses.
Lessons from Sandy:
Impact to Marine Industry
• Inland/Ocean Accumulation Risks
• Ports and stevedore operations exposed to significant storm surge
• Chelsea art district flood and storm surge exposure
• Are cargo/transit policy occurrence limits adequate?
• Warehouses
• Flood maps are inaccurate – location and aggregation issues
• How cargo is stored matters
• Yachts & Marinas
• Haul-outs caused more damage than proper mooring in place
• Pilings too short
• Correct insurance to value - cost to rebuild to code may be significant
© Copyright 2013 Munich Reinsurance America, Inc. All rights reserved. "Munich Re" and the Munich Re logo are
internationally protected registered trademarks. The material in this presentation is provided for your information only, and
is not permitted to be further distributed without the express written permission of Munich Reinsurance America, Inc. or
Munich Re. This material is not intended to be legal, underwriting, financial, or any other type of professional advice.
Examples given are for illustrative purposes only. Each reader should consult an attorney and other appropriate advisors
to determine the applicability of any particular contract language to the reader's specific circumstances.
Source: NASA