Just Tell Me Whether Andrew is Coming

On Saturday, August 22, 1992, I met with Herb Saffir (coauthor of the Saffir-Simpson Scale) in his Coral Gables office, south of downtown Miami, discussing a manual for post-storm damage investigation. I was also due to be the hurricane scientist member of a panel that Herb was chairing for the American Society of Civil Engineers. As the meeting ended it became apparent that Andrew, which had become a hurricane that morning, was approaching the Bahamas and was not going to recurve northward as hoped. It was coming right at us.

My home was in Coconut Grove, about three miles south of downtown Miami. I called my wife and told her to get to the Publix supermarket since a hurricane warning was imminent and we knew from earlier storms that there would soon be a run on supplies. I headed off to Home Depot for plywood and wondered how I could protect the house and still make my scheduled research reconnaissance flight into the storm on Sunday, working on one of the National Oceanic and Atmospheric Administration’s (NOAA) P3 Hurricane Hunter aircraft. As a hurricane wind specialist, I would be monitoring the wind field and radar displays over a proposed ten-hour mission. That mission was scrubbed when it became apparent that the aircraft would need to be evacuated from their base at Miami International Airport.

Instead, the Air Force Reserves of the 53rd Weather Squadron out of Keesler Air Force Base in Biloxi, Mississippi, flew a C-130 into the storm late Sunday, while I thankfully completed my shutters and we accommodated some friends (and their pets) who lived in a storm surge evacuation zone. Our home was near 20 feet (6 meters) above sea level on the coastal ridge in Coconut Grove, so flooding would not be a problem.

Well, Andrew hit overnight, and by 9 a.m. Monday morning, we seemed to be OK. Lots of trees were down and the power out but the house was intact with just a few broken roof tiles and one cracked window. We walked down to Biscayne Bay to check on the flooding and took some pictures, feeling the excitement of viewing a dramatically changed landscape. The mood changed when we received a call (yes, the phones were working even though there was no power) from another friend who was crying and upset about damage further south. We spent hours picking our way about 10 miles south to find that our guest’s home in “Whispering Pines” was within ground zero of the northern eyewall of Andrew. Their roof covering was peeled, double front doors were blown in, and all their living room furniture had been blasted through a sliding glass door into their pool.

Our friends were in shock and time was short due to an impending curfew so we made our way to the main north-south drag, U.S. Route 1 or Dixie Highway (difficult since all the street signs were blown down) for the drive back to Coconut Grove. We were marveling at the lack of any organized response, when we noticed a white school bus making its way southward on US 1.  We couldn’t hold back tears when we saw that the first responders were the City of Charleston Police Department. This was pay back from 1989, when Charleston was hit by Hurricane Hugo and Miami Metro-Dade County helped in the response.

Kate Hale, Emergency Director, Miami-Dade County – interviewed by local TV with regards to response to Hurricane Andrew

Overnight more than 200,000 were left homeless without power and with few supplies. Fifteen died from blunt trauma or drowning in the storm surge. It took days for significant relief to arrive with Kate Hale, the Miami-Dade County emergency director pleading “Where the hell is the cavalry on this one?” Despite the slow pace of response, it was amazing how the communities of South Florida pulled together to help each other out, with neighbors helping each other and sharing supplies.

It was also amazing that the Air Force crew on that C130 flew all night, monitoring Andrew as it strengthened through landfall and continuing to fly a hazardous pattern over land as the storm progressed inland. For several months’ afterwards, my team at NOAA’s Hurricane Research Division worked to piece together data and reconstruct Andrew’s wind field.  We visited sites with incredible damage where lives were lost. The public sent data in and we worked with wind engineering colleagues (Tim Reinhold from Clemson) who borrowed the Virginia Tech wind tunnel to test anemometers similar to the one that measured the peak wind speed in Perrine.

Miami Herald July 22, 1993

State Attorney General Janet Reno called to check on how strong the winds really were to allay some of the rumors swirling around. The Miami Herald published our wind footprint on the front page in 1993, indicating that the highest winds were north of where originally thought.  Our work was finally published as a two-part paper in Weather and Forecasting, which set the stage for objective analysis of hurricane wind fields. Back then the reconnaissance aircraft did not have a way to measure the winds near the surface, so storm intensity was estimated as a fraction of the maximum flight-level winds, resulting in a Category 4 assessment on the Saffir-Simpson scale. After 10 years, analysis of measurements closer to the surface from a new type of instrument, the GPS dropwindsonde, suggested that Andrew may have been a Category 5 storm at landfall. In 2009, research from an even newer instrument (Stepped-Frequency Microwave Radiometer), that remotely senses wind speed from the radiative emission of sea foam, reinforced the Category 5 assessment.

Hurricane Andrew had a profound effect on everyone living in South Florida at the time. It is one of those life milestones from which we measure everything before or after. Miami-Dade County responded with a tough new building code with product testing and enforcement, which influenced the eventual development of a unified Florida Building Code.  And it kickstarted the insurance industry into using sophisticated models that could estimate the risk of future Andrews, and performance in emergency management and response was found to influence presidential elections. The rebuilding created an economic boom, but many folks moved away while others moved in transforming rural areas such as Homestead in Miami-Dade, from farm fields into suburbs.

And for me, I went on to develop a research analysis system called H*Wind, now fully within RMS, which now allows us to monitor and analyze the wind field in real time using every piece of data we can get our hands on, such as satellite, dropsondes or portable MET towers placed just ahead of the storm by engineering and atmospheric science students and faculty at the University of Florida and Texas Tech. The HWind fields have become the analysis of record for significant landfall events and a standard for model evaluation with hundreds of citations in peer-reviewed scientific publications.

We work with scientists from all over the world to help develop cutting edge techniques for remote sensing of winds from space, or to provide the best possible forcing for a storm surge or wave model. We have a much better idea of the intensity and extent of the damaging winds now, and also developed new damage scales based on integrated kinetic energy that consider the destructive potential of large storms. Our extensive enhanced archive of historical storms is now helping us to design and evaluate new hurricane forecast products that are destined to find their way into RMS(one). RMS HWind is now the world’s leading provider of tropical cyclone wind field data, with observation-based data products for both real-time and historical wind field analyses in the western North Atlantic, Eastern Pacific and Central Pacific basins.

Andrew occurred during a year forecast to have “below normal” activity.  I’m often asked, “What kind of year are we going to have”? My answer? It doesn’t matter… just tell me whether Andrew is coming.

Unpacking Basis Risk

When catastrophe strikes, it is not unusual for the insurance payout to differ from the policyholder’s expectation. The possibility of such a discrepancy is referred to as “basis risk”. The term, however, can be ill-defined and easily misunderstood.

Therein lies the problem, without definition it is easy for the basis risk associated with a structure to remain unidentified and unquantified. If left unspoken, basis risk can lead to problems down the line, when events do occur. So, as a starting point, we can most simply define basis risk as the “difference between expectation and outcome”.

Continue reading

Data Analytics: Fueling the Future of Insurance

Look around and you see the financial services industry being transformed by a newfound ability to tap into a vast amount of data, right at their fingertips. Where business decisions were reliant on intuition and experience, and transactions underpinned by the strength of relationships, data analytics now drives everything from credit rating to complaint handling, from social media-driven marketing to employee performance monitoring.

Continue reading

Taking Advantage of Open Vulnerability Modeling

Competing in the insurance market through differentiation, and demonstrating knowledge and expertise to a client, are central to so many business strategies in this industry. The client values the insight an insurance business delivers on their exposure which is reflected in their premium. Sometimes, taking the regular model output view of risk is exactly what’s called for. But to demonstrate this differentiated offer, what about a view of risk for a specific class of buildings, or even just one building?

Continue reading

Marine Disaster Investigation Leads to Urgent Request to Improve Hurricane Forecasting

Mark Powell, vice-president – model development, RMS-HWind
Michael Kozar, senior modeler, RMS-HWind

In a Safety Recommendation Report issued by the U.S. National Transportation Safety Board (NTSB) last month, the Board took the unprecedented step of requesting that a fellow federal agency, the National Oceanic and Atmospheric Administration (NOAA), together with the U.S. Coast Guard, act immediately to do more in improving maritime safety. The NTSB Safety Recommendation Report was released as part of its ongoing investigation into the tragic sinking of the merchant vessel El Faro, a U.S. flagged, 790-foot (240 meter) roll-on/roll-off container ship with a cargo of containers and vehicles, which sank with all hands during Hurricane Joaquin in October 2015.

Continue reading

The Politics of Basis Risk

Imagine you are a government minister responsible for disaster response. Five days have passed since the hurricane hit your country, and the floods have still not receded. Tens of thousands of your citizens have been made homeless. In the eyes of the people, the government is simply moving too slowly, and the press is baying for action. There is some reassurance though, as you know that over many years your country has paid premium into an international pooling scheme designed to provide substantial funds quickly when such a disaster strikes, to help pay some of the costs of recovery.

But then you hear from the regional multi-state insurance pool to which your finance minister has been contributing hard-fought annual premiums for the past decade. Your country is not going to receive a pay-out. In the scheme’s parametric formula, the value is below the threshold. You have discovered the toxic politics of basis risk.

Continue reading

The Role of Catastrophe Risk Finance in Developing Nations

We all know that prevention is better than cure. Trouble is, sometimes you catch a cold. And if you’re already vulnerable, a relatively small infection presents a big risk – especially if you don’t have timely access to sufficient amounts of the necessary medicines.

Despite the best will in the world, nobody can stop the ground from shaking or the wind from blowing. Nobody can say that the worst-case scenario will never happen.

So, when Mother Nature strikes a vulnerable, low-income country, how bad will the ensuing humanitarian crisis likely be? What will it take financially to recover and rebuild? And is there a role for insurance along with donor aid?

Continue reading

Our Flood Insurance System is Broken. Here’s How We Fix It.

Matthew Nielsen, senior director, governmental and regulatory affairs, RMS

Daniel Stander, managing director, RMS

This blog was first published in The Hill

Breezy Point, N.Y., Oct. 31, 2012 – Street scene after Hurricane Sandy. Source: FEMA

Katrina. Sandy. Matthew. We tend to remember the big-name storms that take over the news cycle for weeks, offering up poignant images of rescued families.

Yet many of us barely notice losses racked up annually from flooding events all over the U.S.: flash floods in the Midwest and Northeast, torrential rains in bone-dry Houston, dam spillways exploding in formerly drought-stricken California.

Continue reading

What Should We Make of the U.S. Severe Convective Storm (SCS) Season So Far?

After a blistering start to the 2017 U.S. severe weather season in which tornado, hail, and wind reports were at near or record levels of activity through to March, recent months have been closer to normal. As of early July, overall observations are still above the 10-year running average (2005-2015), but they’re slowly falling back into the expected bounds.

Nevertheless, the events that have occurred have certainly left their mark on the (re)insurance industry. Total U.S. insured losses from SCS events during the first quarter of 2017 (January-March) were $5.7 billion, the highest in the last 18 years. As of early July, losses were estimated to be greater than $14 billion, marking the tenth consecutive year that SCS insured losses have exceeded $10 billion.

Continue reading

CCRA: 500 and Counting…

In terms of news events, October 28, 2005 maybe wasn’t that eventful. It was National Chocolate Day in the U.S. – an obvious cause for celebration. But for 32 RMS clients sitting in conference rooms in RMS offices as far apart as Hackensack, NJ, through to Tokyo, history was about to be made. After extensive road testing using RMS employees, these 32 brave individuals were the first clients to take the RMS Certified Catastrophe Risk Analyst (CCRA®) exam. Nineteen passed the exam and became our first client CCRA designees.

Fast forward 13 years and 59 training program sessions later, to April 27, 2017 when the most recent CCRA exam was held at five global RMS offices. This exam sitting became a milestone in itself. As of the April 27 exam, we can celebrate passing the 500-designee mark and now have an alumnus of 505 CCRA designees.

Continue reading