Spring into Action: U.S. Severe Convective Storm Season Spins Up

Last weekend (April 13-14) marked the first major U.S. severe convective storm (SCS) outbreak of 2019. Drawing energy from warm, humid air brought over land from the Gulf of Mexico by a dip in the jet stream, hail, strong winds and/or tornadoes were reported in 19 states stretching from Texas to New York. There have been at least nine fatalities reported. The worst damage occurred in Texas, Louisiana, Mississippi, and Alabama, where over 150,000 homes and business lost power.

Damage surveys are ongoing, but as of April 16, there had been 22 tornadoes confirmed by the National Weather Service, including two EF-3 rated tornadoes in Texas, with estimated wind speeds of 140 miles per hour (225 kilometers per hour). Early assessments indicate that several hundred buildings have been damaged or destroyed, but the total number will unlikely be known for a few more days at least – and could be significantly higher. In the meantime, insurers will be sending out loss adjusters to try to establish the scale of the claims they are likely to incur. The final cost may not be known for several months.

But why is spring and not summer the peak season for SCS, what is the current state of SCS risk – and what has its impact been on the insurance industry over the past few years?

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Disaster Risk Reduction: Avoiding the Inevitable

While natural hazards are inevitable, their impact on any given community is not. This is the thrust of the #NoNaturalDisasters campaign.

There’s a truth behind the hashtag. Modern societies are increasingly capable of determining their resilience to natural hazards. We nowadays know enough to prevent extreme weather events from escalating into full-blown disasters. In developed nations, sophisticated forecasting systems, social media networks and engineering capabilities can make any weather-related death seem like pure bad luck.

So, if it’s all down to chance, no particular group in society should be at higher risk. The truth, however, is rather different.

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Cricket Balls from the Sky: Twenty-Year Retrospective on the 1999 Sydney Hailstorm

Still ranked within the top three largest insured loss events in Australia’s history, it has now been twenty years since a hailstorm shattered roofs across the eastern suburbs of Sydney on April 14, 1999. And recent events continue to show the significant risk posed by severe hailstorms – on December 20, 2018, Sydney was hit by “…the worst hailstorm in twenty years” according to the Australia Bureau of Meteorology. On the anniversary of the 1999 storm, we look at both these events and discuss the return period of significant hail losses in Sydney.

For the 1999 event, the large hail associated with the storm damaged 24,000 homes and 70,000 automobiles along its path. There has been much written about the 1999 event, and in 2009 RMS published a detailed 10-year retrospective, but in short, this storm was unusual for several reasons:

  • April 14 was outside of the normal storm season which tends to focus around September through to March
  • The storm had hit late in the day, at 8 p.m. local time; most hit during the mid to late afternoon
  • The size of the hailstones was very large, described at the time as “… cricket-ball, melon, or grapefruit sized…” and up to 12 centimeters (4.7 inches) wide.

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Data Drives Dividends

In the four years since the adoption of the Sendai Framework for Disaster Risk Reduction, the range of stakeholders taking part in the UN’s biennial Global Platform for Disaster Risk Reduction has broadened significantly. And with good reason.

Reducing disaster risk is a shared responsibility. The resilience gap is too large, too multifaceted and too complex to be closed by one stakeholder group alone.

Coupled with an acknowledgement of the need to shift focus from managing disasters to managing disaster risk, a multidisciplinary approach, leveraging private and public sector expertise, has rightly become central to the narrative.

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The All-Peril Cat Five

Why the Saffir-Simpson Hurricane Intensity Scale had five levels we don’t know. The digits on a hand? Better than three, but lower resolution than the dozen rungs for wind speeds or earthquake intensity? Whatever the reason it seems to work.

In the late 1960s, Herbert Saffir, a Florida building engineer, was sent by the United Nations to study the hurricane vulnerability of low-cost housing in the Caribbean. He realized something was needed to rank hurricane destructiveness. Saffir had some “Richter envy” from observing the ease with which seismologists now communicated with the public. In 1971, he contacted Robert Simpson, head of the National Hurricane Center to help link damage levels with wind speeds.

Seeing the opportunity to communicate evacuation warnings, Simpson also added details around the height of advancing storm surges. Better information was clearly needed, after the loss of life in Hurricane Camille on the Mississippi coast in 1969.

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Cyber Risk Models: Time for a Bench Test

RMS recently participated in a cyber model comparison exercise at the Cat Risk Management and Modelling conference in London. These types of comparison for natural catastrophe models have been performed at several conferences during the last decade, but this was the first time that losses from multiple cyber models had been compared in this way. The assessment included established cyber model firms such as RMS and Guidewire, as well start-ups including Corax, Kovrr and CyberCube.

This comparison exercise clearly demonstrated that the cyber modeling industry has not reached a consensus on the likelihood and impact of extreme cyber catastrophes. The comparison was run against a small number of accounts – looking at a total of 46 U.S. companies across a range of industry sectors.

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LockerGoga Cyberattack on Norsk Hydro

On Monday, March 18, 2019, Norsk Hydro, one of the world’s largest aluminum producers, announced the replacement of its CEO, who had left the company through early retirement. This followed admissions that the company was responsible for a massive environmental spillage of bauxite residues at its plants in north-eastern Brazil in February 2018. As a result, a government-imposed shutdown of some of Norsk Hydro’s operations had seen aluminum production at its Alunorte refinery cut to just 50 percent of its capacity.

Late that same evening, the company’s IT team became alerted of a major cyberattack. At a press conference the following morning, it was the CFO rather than CEO who disclosed that IT systems in most Norsk Hydro business areas were impacted, including the digital systems at its smelting plants. Apart from switching to manual operations at its smelting plants, several metal extrusion plants had to be shut down. Acting resiliently to avoid infection from one plant to another, Norsk Hydro quickly isolated its plants.

Alunorte alumina refinery, Barcarena, Pará, Brazil. Image credit: Flickr/Amazônia Real

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European Floods and the Relationship with the North Atlantic Oscillation

Stefano Zanardo, Principal Modeler, RMS

Ludovico Nicotina, Senior Director – Modeling, RMS

Arno Hilberts, Vice President, Model Development, RMS

Steve Jewson, Scientific Research Consultant, RMS

The North Atlantic Oscillation (NAO) describes the fluctuations in the difference of atmospheric pressure at sea level between two semi-permanent centers of low and high pressure in the North Atlantic: the Icelandic Low and the Azores High. Fluctuations between these centers control the strength and direction of westerly winds and location of storm tracks across the North Atlantic.

Why is this important? The NAO signal is Europe’s dominant mode of climate variability and correlates highly with European precipitation patterns. Typically, when the NAO is positive – characterized by a higher than average pressure difference between low and high latitudes of the Northern Hemisphere, Northern Europe experiences strong westerly winds. This causes stormier and wetter than usual conditions in Northern Europe, while Southern Europe is drier and colder than usual.

In contrast, when the NAO is negative, Southern Europe experiences westerly winds and the meteorological pattern is somewhat opposite, with Southern Europe being generally wetter than average. The NAO is significantly stronger in winter than in the other seasons, therefore, most studies on the NAO focus on winter months, when the influence of the NAO on surface temperature and precipitation is highest.

When climate patterns result in changing prevailing conditions, such as increased storm activity and rainfall, it is important to understand their effect in relation to the severity of flood events – responsible for significant property damage, business disruption and loss of life in Europe. And there is a need to understand its ongoing impact as the climate and the distribution of exposures change over time.

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Exceedance 2019: Expanding Your Horizons

Regular attendees to the annual RMS Exceedance conference will know how comprehensive our agenda is, in terms of the sheer breadth of topics and areas we cover. Our aim is to deliver a program designed to highlight the issues, opportunities, and the solutions available to tackle the challenges that the risk management industry faces.

Join us in Miami (May 13 – 16) for this year’s Exceedance, and in addition to our keynote presentations (and of course, social events, The Expert Bar, our thirtieth anniversary, and the EP), the mainstay of our conference focuses on sessions spanning across seven in-depth “track” themes.

Our tracks cover a broad range within its defined theme over two days, with educational sessions, panel discussions, case studies, and “how-to” and technical deep-dives. All the track descriptors are available on the Exceedance website. Attendees can immerse themselves in a single track or pick and mix across all seven to create their perfect agenda.

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European Windstorm: The Name Game

Tanja Dallafior – Modeler, Event Response, RMS

Michèle Lai – Product Manager, Model Product Management, RMS

Tom Sabbatelli – Manager – Event Response, RMS

A typical European windstorm season usually spans from October to March, with a peak of activity during the winter months. But with a quiet and sunny February, due to a strong blocking situation in Western Europe, had spring arrived? No, Mother Nature decided differently, and March came with its series of windstorms, and although March is not over yet, let’s look at what has happened so far.

What’s in a Name?

March 2019 started with the formation of a westerly weather pattern that prevailed until March 16-17, and an unstable atmospheric situation that brought a series of eight spring storms passing through Europe in just over two weeks. This series of storms brought damage and disruption across Europe, with uprooted trees, power outages, transport interruptions on road, rail, and in the air, injuries and even fatalities were reported.

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