Author Archives: Robert Muir-Wood

About Robert Muir-Wood

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. Robert has more than 25 years of experience developing probabilistic catastrophe models. He was lead author for the 2007 IPCC Fourth Assessment Report and 2011 IPCC Special Report on Extremes, and is Chair of the OECD panel on the Financial Consequences of Large Scale Catastrophes.

He is the author of seven books, most recently: ‘The Cure for Catastrophe: How we can Stop Manufacturing Natural Disasters’. He has also written numerous research papers and articles in scientific and industry publications as well as frequent blogs. He holds a degree in natural sciences and a PhD both from Cambridge University and is a Visiting Professor at the Institute for Risk and Disaster Reduction at University College London.

How Did the Global Risk Report Become Existential?

Mid-January saw the publication of the annual World Economic Forum (WEF) “Global Risks Report” timed to set the agenda during this week’s WEF Annual Meeting in Davos.

With each new edition – and this year’s edition is the fifteenth, inevitably, one first turns to the opening page of the report, to discover the Top Five Global Risks for 2020, in terms of their “likelihood” and “impact”. What has been trending and what has slipped down the chart?

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Risk Modeling for the Future

The World Economic Forum (WEF) has celebrated its fiftieth-year at its annual meeting in Davos. Increasingly the business/political nexus has become that articulated in WEF founder Klaus Schwab’s Davos Manifesto, that corporations “… must assume the role of a trustee of the material universe for future generations.”

In 2020, “Action on climate change” has now become the number one risk in terms of impact in the World Economic Forum’s Global Risk Report. The work at RMS on quantifying risk and exploring how risk is expected to shift under climate change has never been more important or timely.

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The Storm Surge and the Tsunami

The core idea behind catastrophe modeling is that the architecture of risk quantification is the same whatever the peril. While a hurricane is not an earthquake, building a hurricane catastrophe model has elements in common with an earthquake catastrophe model. Stochastic event occurrence, the hazard footprint, the damage mechanism, clustering, post-event loss amplification are all shared concepts.

While on the university campus, disciplines may retain their nineteenth century segregations, in catastrophe modeling we are “ecumenical” about what is the driver of loss: whether it is wind, hail, vibration, flood, cyber, a virus or a terrorist attack. The track of a hurricane, the track of a fault rupture: the contagion of influenza, the contagion of NotPetya malware: the topographic controls of flooding, the topographic controls of wildfire. Exploring the parallels can be illuminating.

Which is why it is interesting to discover historical figures, who like catastrophe modelers, have looked sideways across the catastrophe disciplines. One such figure is the Anglo-Greek Lafcadio Hearn (unless you are from Japan where he is known as Koizumi Yakumo.)

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How to Deliver Sea Level Data

Global sea levels are rising. After two thousand years of stability, the transition to continuous coastal change will be jarring (although this is what our shoreline ancestors experienced more than 6,000 years ago). By the end of this century, millions of people will need to relocate. An estimated two trillion dollars of assets lies within the first meter above extreme high tide.  

Future sea levels” is one of seven “Grand Challenges” of the World Climate Research Programme (WCRP). Through the week of November 11, leading experts from around the world met in Orléans at the headquarters of the Bureau de Recherches Géologiques et Minières (BRGM), the French geological survey.

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Venice in Peril

The first time I noticed the coincidence I assumed there had been a mistake. The most-costly flooding in modern Italian history inundated the city of Florence on November 4, 1966. The Arno river burst its banks and flooded the low-lying heart of the city, with six meters (19.6 feet) of water in some riverine streets. A hundred people died and three to four million priceless medieval books and manuscripts along with precious artworks stored in basements, were damaged and destroyed. It was the worst flood in the city for at least 400 years.

Flood marker on a Venice street. Image credit: Wikimedia

But then the highest measured storm surge flood “acqua alta” in Venice, reached 1.94 meters above the sea level datum, on the same day in November 1966: November 4.   

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Crossing the Terrorism Casualty Protection Gap

This blog was first published as an article in Insurance Day

The victims of the Las Vegas shooter Stephen Paddock, the injured and the dependents of the 57 who died have one comfort following their tragic predicament. Their vicious and indiscriminate attacker (whose reported comments get the attack classified as “domestic terrorism”) chose to fire at the 20,000-plus crowd attending the Route 91 Harvest music festival from the 32nd floor of the Mandalay Hotel, part of the MGM chain with a US$735 million liability insurance coverage. As a result (reflecting in part the “moral hazard” of insurance limits), the victims will receive the distribution (after substantial lawyers’ fees) of a near-US$800 million settlement.

In the lead-up to the attack on October 1, 2017, Paddock had researched renting a high-rise condo in Las Vegas and also explored the crowd numbers on the beach at Santa Monica and considered other festivals to target in Boston and Chicago. If he had chosen to shoot from a residential building or clifftop, to the same effect, the only compensation the victims could have expected would have been the US$11 million raised in a public appeal after the shooting: equal to around US$200,000 for each of those who died. As it is, their compensation should work out 30 times more generous.

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The Year of the Kitten

Almost three months ago we passed a remarkable record in catastrophe loss.

And yet no one seems to want to celebrate it.

No banner headlines in the newspapers. No speeches at the Monte Carlo Reinsurance Rendezvous.

The first half of 2019 generated the lowest catastrophe insurance loss for more than a decade. The estimates come in at: US$15 billion (Munich Re), US$19 billion (Sigma), or US$20 billion (Aon). In straight dollar terms, independent of any adjustment for inflation or exposure, this is lower than any year since 2006.

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Hurricane Dorian: Who Takes Responsibility for the Loss of Life?

In late 2005 I was on New Providence Island, Bahamas, producing a map to show which properties around the island were within the storm surge flood zone. The northern islands of the Bahamas had been battered by 19 feet (six meters) of storm surge in 1999 during Hurricane Floyd and flooded again in 2004 Hurricanes’ Frances and Jeanne.  

While wandering around the poorer, south side of Nassau, I came across a single-story building, probably a community center or clinic, with barred windows, on which was written “Hurricane Shelter”. It was sufficiently surprising that I even took (and kept) a photo – see below, for the “Hurricane Shelter” was only two to three feet above sea level. If people gathered at this shelter as a strong hurricane approached, they would be placing themselves in mortal danger from an accompanying storm surge.  

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Finding the City That Holds Your Climate Future

Imagine, instead of trying to communicate the prospective climate change future, you could just time travel to experience the weather of 2050.

In place of having to convince the city engineers of Paris or Chicago to invest in better street drainage and passive-cooling architecture, you could take them to experience their city in thirty years, well within the lifetime of the facilities and infrastructure they are constructing today. Rather than having to factor in seemingly arbitrary modifiers to flood or heatwave risks, to stress test your future insurance losses, you could visit an insurer already experiencing and pricing those future climate extremes.

In evaluating climate, we already have an alternative to time travel – we can travel in latitude. You could accomplish all these tangible goals, if you could identify the place which today already experiences your future climate.    

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The Disappearing Tokyo Risk Audit

Without the ability to measure, how do we know if we are making progress?

In December 2012, in preparation for the renewal of the UN Millennium Development Goals, I wrote a report for the U.K. Government Department for International Development (DFID) advocating that catastrophe models should be used to measure progress in disaster risk reduction. I suggested goals could be set to target a 50 percent reduction in expected casualties and a 20 percent reduction in normalized economic losses, over the period of a decade, based on the output of a catastrophe model.

Two years later, the seven targets agreed at the UN meeting on Disaster Risk Reduction, held on March 14–18, 2015, in Sendai, Japan – were a disappointment. The first two targets for “Disaster Mortality” and “Affected People” would simply compare data from 2020-2030 with 2005-2015. The third target was to “reduce direct disaster economic loss in relation to global GDP by 2030”. Yet we know, especially for casualties – even at a global level, a decade is not enough to define a stable mean. For cities and countries, comparing two decades of data will generate spurious conclusions.

And so, it was a relief to see that only two weeks later, the Japanese and Tokyo city governments announced they had set themselves the challenge of halving earthquake casualties over a decade, measured by modeling a hypothetical event based on the M7 1855 Edo earthquake under Tokyo. I referenced this announcement and quoted it widely in presentations, to highlight that risk modeling had been embraced by the country with the most advanced policies for disaster risk reduction.

Over the last two years, I started searching for some update on this initiative. What kind of progress in risk reduction was being achieved, whether the targets for Tokyo would be met? And I found my original links had all stopped connecting. Perhaps in my enthusiasm I had dreamt it?

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