Author Archives: Michael Drayton

Michael Drayton

About Michael Drayton

Michael Drayton has worked with RMS for over 20 years developing and supporting catastrophe models on a wide range of perils.

As a modeler based in London, he worked on the first generation of continent-wide models for European winter storms and the first basin-wide North Atlantic hurricane models.

He returned home to New Zealand in the early 2000's, modeled Australian cyclone risk and developed a high-resolution convective storm model.

Since the Canterbury Earthquake Sequence in 2010-2011 Michael has been the RMS liaison between model developers and local experts from many disciplines as well as insurers, regulators and government. He has an academic background in Civil Engineering and Applied Mathematics.

Should New Zealand Be Content with the New EQC Coverages and Caps?

The revised earthquake coverages and caps proposed by the New Zealand Earthquake Commission (EQC) came into law as planned on July 1, 2019. As noted in an RMS blog back in February, these well signaled changes – to increase the building coverage from NZ$100,000 to NZ$150,000 and remove the NZ$20,000 contents cover, only had a small effect on the gross average annual loss for both EQC and the private market. Swapping the first layer of contents exposure for a larger, higher layer of building exposure produced a result that was close to neutral.

Examining the Exceedance Probability (EP) curve (see figure 1 below), the changes are small across all return periods. There are small increases in loss for the private market at short return periods (which produce the small increase in average annual loss reported earlier) but very little change at long return periods.

Critically, the modeled gross 1000-year loss to the private market is essentially unchanged, meaning there are no implications with regards to the Reserve Bank of New Zealand (RBNZ) solvency requirements. Further, these EQC coverage changes are not expected to affect the peril balance driving trans-Tasman solvency considerations where both the RBNZ and Australian Prudential Regulation Authority (APRA) standards must be met.

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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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