Since 9/11, there have been sporadic attacks on Muslims in Western countries, perpetrated by right-wing terrorists, but none has been more horrific and shocking than the coordinated assault on two mosques in Christchurch, New Zealand, after Friday prayers on March 15, 2019.
Anniversaries have a special significance in the terrorist calendar. This act of wanton religious violence took place several weeks after the 25th anniversary of the most infamous mosque shooting, in Hebron, Israel, on the morning of February 25, 1994. Baruch Goldstein, a doctor raised in U.S., entered the mosque at the Tomb of the Patriarchs, pulled out an assault rifle, fired 111 shots, killing 29 Muslims, injuring 125 others. It looks as if this carnage was surpassed in Christchurch.
Terrorist lone-wolves, like Baruch Goldstein, are hard to track because they leave only a small plot planning footprint. The Christchurch attack appears well coordinated and executed, and would have left a sizeable plot planning footprint, that security officials might potentially have detected.
On January 30, Judge William Alsup, district judge for the Northern District of California presided over a hearing to discuss the inclusion of wildfire prevention in a 2016 Probation Order mandated to Pacific Gas and Electric (PG&E) in the aftermath of the 2010 San Bruno gas explosion that left eight dead.
An order to add conditions to their existing probation, filed on January 9, aimed to “…protect the public from further wrongs by the offender, to deter similar wrongs by other utilities, and to promote the rehabilitation of the offender…” The order included the determination from CAL FIRE that PG&E caused 18 wildfires in 2017, with CAL FIRE continuing its investigations into the causes of the more recent Camp Fire last year.
From major wildfires just over four months ago, and now major flooding, Northern California seems to leap from one perilous state to another. This time, rainfall from a “potent atmospheric river”, as described by the National Weather Service, caused flooding to over 3,000 properties in Sonoma County. This atmospheric river – a flowing column of condensed water vapor pumped up from the Tropics which can be up to 375 miles (603 kilometers) wide – started delivering rain and snow into the region late on Sunday, February 24.
The small town of Guerneville (pop. ~4,500) fared worst, reporting nearly 21 inches (529 millimeters) of rainfall in just 72 hours by 5 p.m. local time on Wednesday, February 27. The source of the town’s flooding was the Russian River, which flows from Mendocino County through to Sonoma County, reaching a maximum level of 45.5 feet (13.9 meters) at Johnson’s Beach, near Guerneville. This exceeded the defined 40 feet (12.1 meters) threshold for a major flood at this point, with local media reports stating that this is the worst flooding since New Year’s Day in 1997, when the river rose to 45 feet (13.7 meters). The nearby Napa River also crested at 26 feet (7.92 meters), one foot above the flood stage.
The town of Guerneville, which was originally built on a meander in the river, on February 27 was declared by the Sonoma County Sheriff’s Office “… [as] officially an island …” as all roads in an out of the town were flooded. 4,000 residents in both Guerneville and Monte Rio (pop. ~1,200) were under evacuation orders until Friday, March 1.
The North Atlantic hurricane season runs from June 1 to November 30 but based on the large exposure the (re)insurance industry has to hurricanes, intrigue about what each season will deliver persists year-round. And with three months to go until the official start of the 2019 season, (re)insurers and catastrophe modelers are actively looking ahead to see what it might deliver.
Although the National Oceanic and Atmospheric Administration (NOAA) does not issue its annual seasonal activity forecasts before late May, others in the meteorological community do provide early indications of upcoming activity. These started as early as December last year with forecasts and commentary issued by Tropical Storm Risk (TSR) and Colorado State University (CSU). But how skillful are these extended range forecasts and what insight, if any, can we gain from them?
What will the 2019 wildfire season bring across the United States?
Across the United States, around eight and a half million acres burned in 2018, nearly three times the annual average during the 1980s and 1990s. That is the equivalent of the entire state of Maryland burning in one year. Last year’s Camp and Woolsey fires in California burned a total of 245,000 acres – these two fires alone burnt a combined area around three times the size of Detroit, destroyed more than 12,000 structures and killed 80 people.
It is getting hard to argue that the size and ferocity of the most recent wildfires across the U.S. are just anomalies, the evidence just does not support these events as being exceptional anymore.
As California’s then Governor Jerry Brown stated at a press conference as the Camp and Woolsey fires raged, these wildfire events are “… the new abnormal …” and that events may worsen over the next few decades. He added that “… the best science is telling us that dryness, warmth, drought, all those things, they’re going to intensify.”
This article was originally published in Insurance Day, click here to view the original article.
Livestock insurance represents a significant part of global agriculture premium. Traditional indemnity insurance products are available, complemented with less common products like parametric index insurance. Managing livestock insurance is a complex business, as livestock mortality is a recurring event.
China is one of the biggest players as the world’s largest livestock producer. In China, livestock insurance premium represents about 25 percent of total Chinese agriculture premium, making livestock risk management a major concern for the insurance industry.
Like China, many countries have improved their contingency plans and established controlled diseases centers to reduce mortality event impacts. In China, major recent disease epidemics include Foot and Mouth Disease (FMD), Porcine Reproductive and Respiratory Syndrome (PRRS), Swine Fever, Avian Influenza and Newcastle disease. Noticeable epidemics since 1995 include SARS in 2003 (poultry), major FMD and PRRS in 2006 and 2007 (pigs), and FMD in 2009 and 2010.
Across the global risk management community, we are bombarded by new information every day. As risk professionals we have to prioritize how we give our attention to new information. From an RMS perspective, when we release new model insights, we know there is a need to be concise and boil down huge research projects into just the important details. But there is a concern that the top-level results get taken as a uniform value that can be applied across the board, losing vital nuance.
When RMS released its New Zealand Earthquake High-Definition (HD) model in mid-2016, an important message was that the annual average loss (AAL) had increased by 30 percent. The ground-up, all-lines, countrywide AAL increased 30 percent relative to the previous version of the model released in 2007. An increase in loss came as no surprise after the Canterbury Earthquake Sequence of 2010/11 – see our New Zealand earthquake blogs.
The HD model was launched at two industry seminars in Wellington and Auckland and came with online documentation: some 44 pages of Understanding Changes in Results and 114 pages of model methodology, supplementary materials on our RMS OWL client portal and a team of modelers happy to talk about their work.
Faced with this information, one approach is to note that the New Zealand market is very consolidated so industry figures should be useful guides for actual portfolios. Let’s just use the old model and scale it by 30 percent. “She’ll be right”, as they like to say in New Zealand. But with two models being so different, this scaling-up would not make sense. Why are they so different?
On February 1, I had the opportunity to speak at a panel session entitled “Technology as a Driver for ILS Growth” at the Artemis ILS Conference in NYC. It was a full house, with 350 attendees from across insurance, banking and financial markets. My fellow panelists were Sean Bourgeois, CEO of Tremor Technologies; Yaniv Bertele, Co-founder and CEO of Vesttoo, and Andries Hoekema, Global Head of Insurance for HSBC Global Asset Management. This session was chaired by Tom Johansmeyer, Co-head of PCS Strategy and Development from Verisk Insurance Solutions.
Despite the impact of consecutive years of losses, the insurance-linked securities (ILS) market continues to strengthen and expand to become a significant provider of global reinsurance and risk capital. And as financial instruments become more complex, and competition increases, the ability to successfully adopt new technology will emerge as a differentiator to separate the winners from the losers.
From our panel discussion, we had general agreement on what these technology drivers of ILS growth will be, and we coalesced around five drivers:
Two people died and thousands of properties in the North Queensland coastal city of Townsville (pop. ~168,000) have been flooded, following an unprecedented rainfall event for the region, driven by a very active monsoon trough that is refusing to budge and a slow-moving tropical low dragging moist air down from the equator.
According to the Australian Government Bureau of Meteorology (BoM), Townsville has experienced record rainfall, with 1,153 millimeters (45 inches) – equivalent to a year’s worth of rainfall, falling over a seven-day period up to Monday, February 4.
To add to the city’s problems, on Sunday, February 3, the Ross River Dam at the mouth of Lake Ross, just five miles (eight kilometers) from the center of Townsville, reached 247 percent of its typical capacity, and a record-breaking height of 42.99 meters. With the river running through the city, the dam’s flood gates were opened allowing 1,900 cubic meters of water per second to flow downstream in order to prevent catastrophic dam collapse. Local authorities suggested this could have affected up to 2,000 homes in Townsville. More heavy rain is still forecast for the next few days and while the rainfall rate has eased the event is not over yet.
This article was originally published in The Insurer, click here to access the original article.
Examples of data theft continue to stream through; no one brand seems immune from having to announce major losses of customer data records. Uber paid US$148 million to settle a legal action over a cyberattack in 2016 that exposed data from 57 million customers and drivers. Forbes reported that Yahoo agreed to pay a US$50 million settlement to roughly 200 million people affected by the email service’s 2013 data breach.
It is still the case that data theft is the leading source of loss for both insurers and reinsurers that cover cyber. The cyber insurance market is still in an early growth stage as the overall economic impact on the global economy from cyberattacks in 2017 was estimated at US$600 billion. Insured loss for standalone cyber policies was a fraction of this, at around US$1 billion to US$1.5 billion. But with cyber risk continually evolving, insurers may have to contend with a new, growing source of loss as cyber attackers are turning to ransomware, as it offers a potentially easier and more lucrative attack method.
Ransomware sees malware infiltrated into the networks of a company and disables servers or locks up data until a ransom is paid. This contagious malware, of which WannaCry and NotPetya are probably the most renowned examples, can even plague companies with high standards of security, and has the ability to scale and to cause systemic loss to thousands of companies. Attackers have also stolen data from a company, and then attempt to extort a ransom from the victim company in return for the data.
Overall, the number of ransomware attacks are increasing each year, and for cyber attackers there is the easy availability of ransomware to buy on the dark web. As outlined in our recent RMS Cyber Risk Outlook Report, estimates of ransomware extorted in 2017 exceed five billion dollars, a 15-fold increase over the previous two years.