Monthly Archives: October 2018

Australia Earthquake Hazard: Now Reduced by Up to Seventy Percent

On October 18, 2018, Geoscience Australia (GA) released its latest view of earthquake hazard for Australia. A headline finding from the 2018 National Seismic Hazard Assessment (NSHA2018) is the reduction of the 475-year peak ground acceleration hazard estimates on rock conditions by up to 70 percent. While GA had updated the Australian seismic hazard model in 2012 (Burbidge et al., 2012), the basis of the Australia building code is a 1991 map described by McCue (1993) which is included in the Global Seismic Hazard Map (figure 1 below) published nearly twenty years ago (Global Seismic Hazard Assessment Program (GSHAP); Giardini, 1999). This 2018 update is pivotal in addressing the long running scientific debate started since.

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Hurricane Michael Field Reconnaissance: Contrasting Performance of Structures at Design Wind Speeds

Peter Datin, Director, Model Development, RMS

Derek Stedman, Lead Modeler, RMS

Holly Widen, Product Manager, RMS

 

Introduction

Hurricane Michael made landfall in the Florida Panhandle near Mexico Beach on October 10, 2018, as the strongest hurricane (by wind speed) to impact the area in recorded history. As a strong category 4 hurricane, Michael’s wind speeds were at or above the design-level wind speeds for this area specified by ASCE 7 and the Florida Building Code. Figure 1 below shows the RMS HWind 3-second peak gust footprint with the design wind speed contours from ASCE 7-16 for Risk Category II structures (e.g., single-family homes and most commercial structures).

Figure 1 : RMS HWind 3-second gust footprint for Hurricane Michael overlaid with the design wind speed contours in ASCE 7-16

The Florida Panhandle has historically considered itself less prone to intense hurricanes than other coastal areas such as the Greater Miami Area, where the probability of category 4 and 5 storms is much higher. As an example, in the history of the Florida Building Code (FBC), the Panhandle successfully lobbied for an exception to the windborne debris provisions that were introduced in the original 2001 FBC. This exception was ultimately lifted in 2007 but highlighted that this area contained many examples of pre-FBC construction side-by-side newer construction built to higher standards, featuring wind damage mitigation measures suggested by the engineering community and organizations such as the Insurance Institute for Business and Home Safety (IBHS).

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“We Can’t Control the Catastrophic Events. But We Can Control How We Deal With Them.”

Join our upcoming webinar and learn about risk modeling best practices from RMS Analytical Services

Standard and Poors (S&P) has been providing ratings for insurance carriers since 2005 by examining their risk management practices. They view effective Enterprise Risk Management (ERM) as a supporting pillar of their rating analysis, as ERM reaches across all the core attributes of a business.

This includes a carrier’s treatment of catastrophic events, and their preparation for the “unexpected”, with S&P laying out a method for carriers to establish best practices in this area. And, according to their recent findings, they concluded that carriers with stronger ERM programs weathered the 2017 natural catastrophes better than those with weaker programs.

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2018 North Atlantic Hurricane Season: Where Are We Now?

In the last month or so, two significant North Atlantic hurricane events have brought the latter half of the current hurricane season into sharp focus — and what marks these two events out was how different they were. With Hurricane Florence making landfall on September 14 in North Carolina, this event was one of the most intense storms to go above 30 degrees north in recent history.

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What’s the Outlook for Europe Windstorm Activity This Winter?

With annual windstorm losses in Europe ranging from a couple of hundred million to tens of billions of Euros, it is no wonder the insurance industry is interested in forecasting winter storminess. However, we cannot let the potential of good returns distract from a full understanding of what winter forecasts really say about future wind losses.

Over the past few years, RMS have been distilling the vast amount of research in this field into key insights for the insurance industry, with a series of annual blogs on the outlook backed up by a more detailed research paper (available to RMS licensing clients). Before we discuss the forecast for this year, we look back to last year’s forecast.

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Comparing Major Hurricane Michael to Recent Gulf Hurricanes Using Integrated Kinetic Energy

Co-authors: Michael Kozar, Senior Modeler, RMS HWind; James Cosgrove, Senior Analyst, RMS Event Response

Michael underwent rapid intensification in the two days leading up to landfall, reaching the Florida Panhandle coastline as a strong Category 4 major hurricane with maximum sustained wind speeds of 154 miles per hour (247 kilometers per hour), according to the RMS HWind real time service. At landfall, Michael had a tight inner core and its strongest winds were located just 14 miles (22 kilometers) south-southeast of the center of the storm near Mexico Beach. Tropical storm force winds extended up to 115 miles (185 kilometers) eastward along the Panhandle coastline to Pensacola.

Whilst the Saffir-Simpson Hurricane Wind Scale (SSHWS) is exclusively based on maximum sustained wind speeds, which often only covers a very small part of the system, the Integrated Kinetic Energy (IKE) metric conveys the intensity, size, and structure of the storm’s wind field into one number and has become a useful metric for comparing the destructiveness of storms. Using the IKE metric, we can compare and contrast Hurricane Michael to other events in the RMS HWind historic archive.

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An Award-Winning Approach to Risk Modeling for North America

As an organization, it is always great to get recognition from the industry for the work that you are doing; and industry recognition does make a real difference to the teams that work so hard to produce robust, quality solutions that are solving the problems that the market faces. And so, on September 27, off we went to Cipriani 25 on Broadway in New York, for the Eleventh Reactions Annual North America Awards, with RMS receiving the “2018 North America Risk Modeler of the Year” award.

This award is decided by votes from the industry and it recognizes our reputation for providing best-in-class support and leadership to our North America clients, and especially at times when insight is so critical to a business — such as during the significant cat events that ran through 2017. It also provides an endorsement for the approach that RMS is taking more generally to anticipate and deliver on the needs of the North America market, to keep pushing the boundaries and break new ground, to help a growing client base across the industry ranging from reinsurers and carriers through to capital markets.

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The Full Extent of Michael’s Impact Becomes Clear

From first light yesterday (October 11), the full extent of the damage from Major Hurricane Michael across the Florida Panhandle and the wider region became clear — and it really was as catastrophic as we all had feared.

Although Major Hurricane Michael could be regarded as a more traditional “wind and surge” event compared to recent flood events of hurricanes Harvey and Florence, this was not just a coastal event. The trail of destruction extends far from the landfall location near Mexico Beach (pop. ~1,000) and neighboring Panama City (pop. ~36,000) and well into the state of Georgia. Whether it is from the destruction of homes in the towns near landfall, or the widespread power outages, felled trees, damaged roofs, and debris, the clean-up operation is going to be a long process. And tragically, as of Friday, October 12, eight fatalities have been confirmed, including four in Florida, one in Georgia, and one in North Carolina.

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Ultra-liquefaction Changes Everything

It turns out the biggest killer in the Palu earthquake on the island of Sulawesi, Indonesia, may not have been the tsunami after all — but liquefaction. Two thousand victims of the earthquake and tsunami are confirmed but 5,000 people remain missing, many of them presumed swallowed up in extraordinary ground deformation and mudflows, which took off when the underlying solid ground liquefied. Some buildings were transported hundreds of meters, others were ripped apart, many collapsed into fragments that then became absorbed into the mud. Media reports state that in Balaroa, just a few kilometers from Palu City, many of the 1,747 houses in the village appear to have sunk into the earth. In Petobo, a village to the east of Palu, many of the village’s 744 houses have disappeared.

What we have witnessed at Palu merits the term “ultra-liquefaction”, as witnessed in the 2011 Christchurch, New Zealand earthquake when perhaps half the total insurance loss costs were a consequence of liquefaction. For Christchurch, in the eastern suburbs it was single storey houses, ripped apart by the ground movements. In the Central Business District (CBD), many mid-rise buildings had to be demolished because underlying liquefaction had led to one corner of the structure sinking by ten or twenty centimeters (four to eight inches).

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Major Hurricane Michael Ravages Florida and the Southeast U.S.

After the flood-driven impacts of Category 1 Hurricane Florence just under a month ago, yesterday’s unfolding drama from Major Hurricane Michael was dominated by damaging winds that were within touching distance of a Category 5 storm.

Major Hurricane Michael made landfall near Mexico Beach, Florida, at 17:15 UTC (12:15 CST) on Wednesday, October 10, as a Category 4 major hurricane — the first Category 4 or stronger hurricane to make landfall in the Florida Panhandle on record. At landfall, its maximum sustained wind speed was 155 miles per hour (250 kilometers per hour), just two miles per hour short of Category 5 classification.

Michael’s intensity at landfall has set numerous records. It becomes the strongest hurricane (by wind speed) to make landfall in the continental U.S. since Andrew in 1992 and the strongest (by wind speed) October landfilling hurricane in the continental U.S. on record. Its minimum central pressure of 919 millibars makes it the most intense hurricane (by minimum central pressure) to make landfall in the U.S. since Camille in 1969.

Michael had undergone rapid intensification of 35 knots and 46 millibars in the 24 hours up to landfall, benefiting from ideal development conditions — minimal wind shear and a warmer-than-usual Gulf of Mexico with sea surface temperatures one to two degrees Celsius above average. Its intensification was relentless right up to landfall and resulted in catastrophic damage in portions of coastline along Florida Panhandle.

Prior to landfall, more than half a million people were under evacuation orders, and more than 20 million people in five states were under either a hurricane or tropical storm warnings.

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