Chief Research Officer, RMS
Robert Muir-Wood works to enhance approaches to natural catastrophe modeling, identify models for new areas of risk, and explore expanded applications for catastrophe modeling. Recently, he has been focusing on identifying the potential locations and consequences of magnitude 9 earthquakes worldwide. In 2012, as part of Mexico's presidency of the G20, he helped promote government usage of catastrophe models for managing national disaster risks. Robert has more than 20 years of experience developing probabilistic catastrophe models. He was lead author for the 2007 IPCC 4th Assessment Report and 2011 IPCC Special Report on Extremes, is a member of the Climate Risk and Insurance Working Group for the Geneva Association, and is vice-chair of the OECD panel on the Financial Consequences of Large Scale Catastrophes. He is the author of six books, as well as numerous papers and articles in scientific and industry publications. He holds a degree in natural sciences and a PhD in Earth sciences, both from Cambridge University.
The World Economic Forum (WEF) Global Risk Report was released a week ago, in time to generate discussion and provoke debate at the WEF Annual Meeting in Davos.
Among the headlines of the Global Risk Report, as in every annual update, there are two lists of the top five risks for 2019, according to their expected Likelihood and Impact. These lists are based on the WEF Global Risks Perception Survey conducted four months ago, with around a thousand responses from the WEF’s multi-stakeholder communities, professional networks of its Advisory Board, and members of the Institute of Risk Management.
There is a sense about these top five lists, that they are reactive – reflecting what has recently happened, more than being an effective and objective analysis of risk. We know that the most dangerous events are precisely those which one has not recently witnessed and that arrive as something of a surprise.
It is now exactly a quarter of a century, on January 17, 1994, since the last significant U.S. earthquake disaster. A previously unknown blind thrust ruptured beneath Northridge, in the San Fernando Valley north of Los Angeles. Casualties were fortunately modest (57 deaths) because the Mw6.7 shock happened at 4.30 a.m. local time, but the damage was significant – estimated as at least US$30 billion in 1994 prices, as the fault lay directly underneath the city.
Sooner or later California will experience another Mw6.7-7.5 earthquake disaster, in the highly populated San Francisco Bay Area or under sprawling greater Los Angeles. Year-on-year, while the probability rises, the proportion of the affected population with any previous disaster experience dwindles. When it happens, in all senses of the word – it will be a great shock.
One prediction is inevitable: after the next big Bay Area or LA earthquake, there will be large numbers of uninsured homeowners, landlords and small business owners looking for compensation. Given the high deductible and low take-up rates for earthquake insurance, as much as 90 percent of the residential losses will not be covered by insurance payouts: a far higher percentage than in 1994.
And the question is then, will the Federal Government response match that which followed Hurricane Maria, or can we expect it to be more like the aftermath of Hurricane Katrina. Or to put it another way: will California be “Puerto Rico” or “New Orleans”?
Indonesia was beset by disasters in 2018, including two high casualty local tsunamis: in coastal western Sulawesi – impacting the city of Palu, on September 28, and around the Sunda Strait, between Java and Sumatra, on December 22. These events may have appeared unusual, but the great subduction zone tsunamis, like those in the Indian Ocean in 2004 and Japan in 2011, have reset our imagination. Before 2004, forty years had passed without any transoceanic tsunamis. Overall, local tsunamis are more common, presenting many challenges in how they can be anticipated.
The Palu tsunami reminds us how “strike-slip” faults, involving only horizontal displacement can still generate tsunamis, first as a result of vertical displacement at “jogs”, where the fault rupture jumps alignment, as well as from triggered submarine landslides. It seems both factors were important in driving the Sulawesi tsunami that became amplified to more than four meters (13 feet) in the funnel-shaped Palu embayment.
The December 22 Sunda Strait tsunami was caused by a submarine landslide on the erupting Anak Krakatoa volcano and arrived without warning, in the dark of mid-evening. More than 400 people drowned mainly around a series of beach resorts in Banten and Lampung provinces, although water levels in the tsunami only reached a meter or two above sea level. An audience of 200 enjoying a concert at the Tanjung Lesung Beach Resort, staged directly on the beach by Indonesian rock band Seventeen were caught unaware. 29 concertgoers were killed together with four people associated with the band.
I am in Wellington, New Zealand, looking out from a rainy hotel window high over the city, admiring the older wooden houses on the forested slopes. Below there are four to eight story office and retail buildings, a number of which are shrouded in scaffolding, still repairing damage from the 2016 Kaikoura earthquake. The earthquake epicenter was some distance from the city, but the pattern of fault ruptures propelled long period ground shaking into the heart of Wellington.
In 1848, only eight years after the city was founded, a Mw7.5 earthquake on the far side of Cook Strait, shattered the town’s brick buildings. The Lieutenant Governor, Edward Eyre, forgetting his official role as colonial booster, declared the “… town of Wellington is in ruins … Terror and despair reign everywhere. Ships now in port … (are) crowded to excess with colonists abandoning the country.” However, the tremors declined, and the town survived.
Many ordinary houses were rebuilt using wood instead of brick. As a result, they suffered far less damage from a larger and closer Mw8.2 earthquake in 1855, that struck at the end of a two-day public holiday to celebrate the fifteenth anniversary of the city’s formation. This ruined all the remaining brick and stone commercial buildings including churches, barracks, the jail, and the colonial hospital. However, the earthquake delivered a tectonic bounty, raising the city by one to two meters (3.2 to 6.5 feet), turning the harbor into new land for development.
Catastrophe modeling remains work in progress. With each upgrade we aim to build a better model, employing expanded data sets for hazard calibration, longer simulation runs, more detailed exposure data, and higher resolution digital terrain models (DTMs).
Yet the principal way that the catastrophe model “learns” still comes from the experience of actual disasters. What elements, or impacts, were previously not fully appreciated? What loss pattern is new? How do actual claims relate to the severity of the hazard, or change with time through shifts in the claiming process?
After a particularly catastrophic season we give presentations around ”the lessons from last year’s catastrophes.” We should make it a practice, a few years later, to recount how those lessons became implemented in the models.
Today is World Tsunami Awareness Day — designated by the United Nations General Assembly, and according to the United Nations Office for Disaster Risk Reduction (UNISDR), on average, tsunami events have a higher mortality rate than any other hazard. Over the past 20 years (1998-2017) tsunamis have claimed more than 250,000 lives and are also attributable for US$280 billion of the US$661 billion of total recorded economic losses for earthquakes and tsunamis. Between 1978-1997, tsunamis claimed 998 lives, and US$2.7 billion in losses. Overall, tsunamis are rare, but as the UN points out, when they occur they are deadly and hugely damaging. This infrequency makes building awareness and preparedness more of a challenge.
The UN has promoted World Tsunami Awareness Day since 2015, and the UN Secretary-General’s Special Representative for Disaster Risk Reduction, Mami Mizutori, stated that “…it is an occasion to promote greater understanding of tsunami risk to avoid future loss of life. This year we also want to bring attention to the economic losses tsunamis can inflict as a result of damage to critical infrastructure located along vulnerable, densely populated coastlines.”
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).
It’s hard to believe that Hurricane Michael, the thirteenth named storm of the 2018 North Atlantic hurricane season, only achieved tropical storm status just two days ago on Sunday, October 7. Tracked by the National Hurricane Center (NHC) since October 2, Michael started out as a broad area of low pressure over the southwestern Caribbean Sea, a couple hundred miles north of Panama.
Becoming more organized as it began to move toward the Yucatán Peninsula, by October 6 it achieved Potential Tropical Cyclone status. Between October 7 and October 8, rapid intensification saw sustained wind speeds jump from 35 miles per hour to 75 miles per hour (120 kilometers per hour) by midday local time on October 8. Skirting between the eastern tip of the Yucatán Peninsula, and the western tip of Cuba, Michael entered the Gulf of Mexico late evening local time on Monday, October 8.
As of 09:00 UTC today (Tuesday 9), the latest NHC advisory located Michael at about 420 miles (680 kilometers) south of Panama City, Florida and about 390 miles (630 kilometers) south of Apalachicola, Florida, with sustained winds at 90 miles per hour (150 kilometers per hour), placing it as a Category 1 hurricane on the Saffir-Simpson Hurricane Wind Scale (SSHWS). Michael is moving toward the north-northwest at close to 12 miles per hour (19 kilometers per hour). Hurricane-force winds extended outward up to 40 miles (65 kilometers) from the center and tropical-storm-force winds extended outward up to 195 miles (315 kilometers).
A version of this article was originally published in Insurance Day
The Mw7.5 earthquake in Sulawesi, Indonesia on September 28 reminds us that fourteen years after the terrible Indian Ocean tsunami, and despite significant investment in systems intended to provide tsunami warnings, the risk to life and property is not going away. To understand why the destruction and loss of life in the city of Palu, with a population of 350,000, is so great (1,300 and rising) we need to understand why this location has proved such a nexus of vulnerabilities.
First, Palu is located less than one degree south of the equator. That means it is in the “shadow zone” for tropical cyclones. In most of the world’s oceans, no tropical cyclone can exist within ten degrees of the equator, although in the western Pacific the typhoon exclusion zone can narrow down to six to eight degrees from the equator. The lack of Coriolis force at the equator prevents a collection of thunderstorms gaining a structured rotation (and tropical cyclones spin in opposite directions in the northern and southern hemispheres).
The lack of tropical cyclones means there are no significant storm surges, or even much in the way of significant wind-driven waves, and as a result people build their houses right down to sea level. This means, in comparison even with a coastal city in Philippines or China, there were many more seafront buildings exposed to a tsunami that reached no more than three to five meters above sea level.
The rallying cry has sounded — to “close the protection gap”, the difference between what is paid out by insurance and the total cost of some incident or disaster. Here is an issue that can unite and promote the insurance industry, extending benefits to those in peril by expanding the insurance sector. Having ex-post access to funding after a loss, we know, can bring important benefits.
Yet in reality, there is not just one, but three distinct insurance “protection gaps”, each with separate causes and each requiring different remedies. These protection gaps are so different to one another that we should stop treating them as a single category. Lumping them together can cause confusion.
In this series of four blogs, I will explore each of these three distinct gaps, together with the role of protection gap analytics, and the actions we can plan to address these protection gaps.