Author Archives: Pete Dailey

About Pete Dailey

Vice President, Model Product Management, RMS

Dr. Dailey is an expert in climate catastrophe model development and analytics with over 15 years of industry experience. At RMS, he leads the RMS U.S. Inland Flood Model, as well as the development of innovative modeling tools for improved risk management before, during and after a catastrophic event.

As the leader of the U.S. Inland Flood Model, his knowledge of this and related perils, and the risk management challenges it presents to the insurance industry, is central to informing the implementation and technical understanding of industry stakeholders.

Dr. Dailey is frequently invited to speak on climate change and its influence on insured risks, and has published numerous articles on these and related topics in peer reviewed literature. He holds dual degrees in Economics and Systems Engineering from the University of Pennsylvania, and received his masters and Ph.D. degrees from the University of California, Los Angeles

Climate Change and NCA4: Part One

When I was a kid, my favorite breakfast cereal was Kellogg’s Sugar Frosted Flakes. As a teenager in the 1980s, I recall that the name changed to Frosted Flakes. In 1983, to appeal to a more health-conscious consumer, Kellogg simply dropped “sugar” from the name. And around the same time, Kellogg’s Sugar Smacks became Honey Smacks. There didn’t seem to be a dramatic reduction in sugar. Even today, sugar makes up over 55 percent of the total content of Honey Smacks and is the lead ingredient. Honey trails at fourth. The idea was … if the consumer didn’t see the word sugar, they wouldn’t necessarily jump to the conclusion that it was loaded with sugar. One could argue that this was just a marketing ploy – yet most would agree it secured marketing appeal by removing a potential distraction from its name.

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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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Hurricane Ike: A Cross-Country Event

It’s just over ten years to the day since Hurricane Ike made landfall near Galveston, Texas. Looking back at the 2008 North Atlantic hurricane season’s activity, it was above-average with 16 named storms, eight of which reached hurricane strength, and five became major hurricanes (Cat 3 or greater). Hurricane Ike did reach Category 4 over the warm waters of the open Atlantic, but later weakened as it tracked along the Cuban coastline, never to fully regain its strength. At around 0710 UTC on Saturday, September 13, 2008, Ike struck the Texas coastline as a strong Category 2 hurricane (on the Saffir-Simpson Hurricane Wind Scale), producing maximum sustained winds of 110 miles per hour (175 kilometers per hour).

It was by far the costliest event of that year, and today remains firmly in the top ten of most costly U.S. hurricanes. At the time, RMS loss estimates were in the range of US$13 to US$21 billion, excluding NFIP (flood) losses. Ike was blamed for at least 195 deaths, as it ravaged the Bahamas, Haiti, Cuba, and onward to the U.S. Ike did not make the history books for its wind speeds, it did not have the destructive wind intensity of more recent events such as Hurricanes Irma and Maria. It was the sheer geographic extent and inland penetration of Ike that makes it stand apart from most other hurricanes.

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Hurricane Florence: A Rare Event

The forecasts for Hurricane Florence have been unusually consistent this far in advance of an anticipated landfall, projecting its path to cross the coast of the Carolinas at major hurricane intensity. For some perspective, if we look at the historical hurricane record since 1850, we find major hurricane landfalls are quite rare along this part of the U.S. Atlantic coastline:

RMS Reconstructed Loss values are based on wind and storm surge damage to present-day exposure, and not on trending forward historical losses

Over the past 167 years, there have been just nine major hurricanes that made landfall along the coast of North and South Carolina. So, on average we can expect one major landfall along this 490-mile stretch of coastline every eighteen and a half years. Certainly, a rare event. Only three of these storms — Hazel, Gracie, and Hugo — were Category 4 (on the Saffir-Simpson Hurricane Wind Scale) at landfall. There has never been a Category 5 landfall north of Florida.

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