You may have noticed recent headlines making some scary apocalyptic 2018 earthquake predictions. Scientific thinking generally evolves slowly and thoughtfully. A headline that proclaims a revolutionary or shocking change in our understanding of earthquakes is likely overstating the certainty of a hypothesis, or may be a misinterpretation that is sensationalized by the media. In such cases, it is always best to go back to the original source of information.
These headlines are based on an article published back in August in Geophysical Research Letters entitled Do Weak Global Stresses Synchronize Earthquakes?
On Thursday April 6, 2017, President Trump ordered a Tomahawk missile attack on a Syrian military airfield. This was a direct response to President Assad’s use of sarin gas to attack Syrian dissidents. Just two days later, the password to an encrypted archive of cyber weapons (stolen from the U.S. National Security Agency) was posted by the so-called Shadow Brokers cyber group. This hacking group is thought to have connections with Russia, which is the leading supporter of the Assad regime. They were angered by President Trump’s action.
An immediate beneficiary of this password release was the Lazarus Group, linked with North Korea, which had been launching ransomware attacks at targets over the previous several months. What they lacked was an effective tool to propagate their ransomware from computer to computer. This missing tool, a Microsoft Windows bug called “EternalBlue”, they now were gifted thanks to Shadow Brokers.
Was Hurricane Irma in Florida a fire drill for the insurance-linked securities (ILS) and collateralized reinsurance markets — or was this the real thing? In terms of losses, what happened is at the lower end of what the Irma loss in Florida could have become. But what if some of the stuffing had not been knocked out of the storm in Cuba, and if Irma had landed on either the east or west Florida coasts instead of lumbering into the Everglades?
If Irma was a fire drill, then one topic it has highlighted is that faced by “trapped collateral”.
As is usual in the weeks following a hurricane’s impact on land, much of the focus surrounding Hurricane Maria has now shifted away from estimating losses with models to surveying the actual damage and claims incurred. With the collection of claims and losses, evaluating the array of loss estimates published by catastrophe model vendors in Maria’s immediate aftermath will begin. Included in this array is the RMS best estimate of insured loss, a range between US$15 billion and US$30 billion.
On September 19, the Mw7.1 “Puebla” earthquake struck Mexico City and surrounding states, causing the most fatalities (369) and damage of any temblor since the Michoacán event in 1985. The Mexican government has not yet published overall economic or insured loss tallies, but six days after the earthquake RMS publicly released an estimate of economic property losses between US$4 billion to US$8 billion and no more than US$1.2 billion in insured property losses.
To better understand the impact of this event, RMS sent a reconnaissance team to the affected region from October 1 to October 6. The RMS team spent most of the trip surveying sites in Mexico City but also visited Cuernavaca, Puebla de Zaragoza, and other cities in the states of Morelos and Puebla that were closer to the epicenter than the capital (Figure 1). This blog shares some of the key observations made by the RMS team.
At the start of the RMS Exceedance conference in New Orleans in March this year, I was interviewed for A.M. Best TV on terrorism risk, and specifically asked what I was envisaging for future terrorist attacks.
I replied that terrorists have been thwarted in their ability to produce large explosives for vehicle bombs, and are likely to use vehicles for ramming groups of people. Less than a day later, on March 22, 2017, such an attack took place on Westminster Bridge, London. Over the summer, several other terrorist vehicle ramming attacks have occurred in London, and one in Barcelona.
Known indicators point to stormier conditions in the North Atlantic this winter. However, what this means for Europe windstorm losses is much less certain.
Our ability to understand and forecast variability of North Atlantic winter storminess continues to improve year-on-year. Research highlights in 2017 include:
- A new, and skillful, empirical forecast model for winter climate in the North Atlantic revealed that sea ice concentrations in the Kara and Barents Seas are the main source of predictable winter climate variations over the past three decades. Interestingly, a separate 2017 study supports earlier forecasts of either a slowing or reversal of the sea ice reductions in the Barents and Kara Seas between now and 2020, implying an uptick in storminess over the next few years.
- An innovative tool to analyze sources of predictability in a numerical forecast model revealed strong links between tropical climate anomalies and winter climate in the North Atlantic in that model.
Twelve months ago, the forecasting indicators for the windstorm season broadly pointed to a 2016/17 season characterized by below average storminess — a forecast borne out by subsequent observations. We have already had a fairly active start to the 2017/18 season, with Windstorms Xavier, Herwart, and ex-Hurricane Ophelia causing local damage, but what is the outlook for the rest of the season?
Kevin Van Leer, senior product manager – Model Product Management, RMS
19:00 UTC Friday, October 27
Figure 1: A door frame of a destroyed home overlooks another neighborhood affected by the Wine Country wildfires (Image credit: RMS)
Accompanied by a CAL FIRE escort, on Monday, October 23, RMS reconnaissance experts visited areas affected by the Wine Country wildfires, with a focus primarily on the Tubbs Fire which caused destruction across the Northern California counties of Napa, Sonoma, and Lake. Based on this reconnaissance, RMS has now updated its loss estimate, benefiting from an additional review of the available damage information, plus a review of historical fire damage data.
Just under ten years ago, as the global financial crisis was unfolding, the book The Black Swan emerged as the most quoted critique of the financial modeling for rare events. The author, Nassim Taleb — the poster boy of sceptics — asserted that these could not be imagined, let alone predicted. Over the past decade, whenever an unmodeled catastrophe has occurred, such as the magnitude 9 earthquake and tsunami that struck Tohoku, Japan on March 11, 2011, catastrophe risk modelers have been reminded of these elusive “black swans”.
Ever since the publication of The Black Swan, I have challenged myself to develop a framework within which such events might be imagined. The solution lies in reimagining history. Since Copernicus, we no longer perceive the Earth as being specially located in the universe. Yet, the anthropocentric viewpoint has maintained that the historical past is somehow special, rather than being just one realization of what might have happened. Most events have either happened before, almost happened before, or might have happened before.
When a hail event lasting just minutes hit southern Germany on July 28, 2013, it generated a US$3.9 billion insured loss. Some 80,000 buildings and tens of thousands of automobiles were damaged — many severely. Such a high hail loss was unprecedented in Europe. It was this event that represented the wake-up call for the insurance and reinsurance industry to think harder about the risk due to severe convective storms.
I had the privilege to lead my team of seven modelers from RMS as we attended the ninth European Conference on Severe Storms (ECSS) which took place between September 18-22 this year in Pula, Croatia. This biannual conference sees hundreds of scientists predominantly from Europe and the U.S. but also from other parts of the world. Hail was prominent on the event agenda among the scientific community, and with rising interest in hail damage there is now also a considerable participation from the reinsurance industry. Munich Re is the main sponsor of the conference.