With annual windstorm losses in Europe ranging from a couple of hundred million to tens of billions of Euros, it is no wonder the insurance industry is interested in forecasting winter storminess. However, we cannot let the potential of good returns distract from a full understanding of what winter forecasts really say about future wind losses.
Over the past few years, RMS have been distilling the vast amount of research in this field into key insights for the insurance industry, with a series of annual blogs on the outlook backed up by a more detailed research paper (available to RMS licensing clients). Before we discuss the forecast for this year, we look back to last year’s forecast.
Co-authors: Michael Kozar, Senior Modeler, RMS HWind; James Cosgrove, Senior Analyst, RMS Event Response
Michael underwent rapid intensification in the two days leading up to landfall, reaching the Florida Panhandle coastline as a strong Category 4 major hurricane with maximum sustained wind speeds of 154 miles per hour (247 kilometers per hour), according to the RMS HWind real time service. At landfall, Michael had a tight inner core and its strongest winds were located just 14 miles (22 kilometers) south-southeast of the center of the storm near Mexico Beach. Tropical storm force winds extended up to 115 miles (185 kilometers) eastward along the Panhandle coastline to Pensacola.
Whilst the Saffir-Simpson Hurricane Wind Scale (SSHWS) is exclusively based on maximum sustained wind speeds, which often only covers a very small part of the system, the Integrated Kinetic Energy (IKE) metric conveys the intensity, size, and structure of the storm’s wind field into one number and has become a useful metric for comparing the destructiveness of storms. Using the IKE metric, we can compare and contrast Hurricane Michael to other events in the RMS HWind historic archive.
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.
From first light yesterday (October 11), the full extent of the damage from Major Hurricane Michael across the Florida Panhandle and the wider region became clear — and it really was as catastrophic as we all had feared.
Although Major Hurricane Michael could be regarded as a more traditional “wind and surge” event compared to recent flood events of hurricanes Harvey and Florence, this was not just a coastal event. The trail of destruction extends far from the landfall location near Mexico Beach (pop. ~1,000) and neighboring Panama City (pop. ~36,000) and well into the state of Georgia. Whether it is from the destruction of homes in the towns near landfall, or the widespread power outages, felled trees, damaged roofs, and debris, the clean-up operation is going to be a long process. And tragically, as of Friday, October 12, eight fatalities have been confirmed, including four in Florida, one in Georgia, and one in North Carolina.
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).
After the flood-driven impacts of Category 1 Hurricane Florence just under a month ago, yesterday’s unfolding drama from Major Hurricane Michael was dominated by damaging winds that were within touching distance of a Category 5 storm.
Major Hurricane Michael made landfall near Mexico Beach, Florida, at 17:15 UTC (12:15 CST) on Wednesday, October 10, as a Category 4 major hurricane — the first Category 4 or stronger hurricane to make landfall in the Florida Panhandle on record. At landfall, its maximum sustained wind speed was 155 miles per hour (250 kilometers per hour), just two miles per hour short of Category 5 classification.
Michael’s intensity at landfall has set numerous records. It becomes the strongest hurricane (by wind speed) to make landfall in the continental U.S. since Andrew in 1992 and the strongest (by wind speed) October landfilling hurricane in the continental U.S. on record. Its minimum central pressure of 919 millibars makes it the most intense hurricane (by minimum central pressure) to make landfall in the U.S. since Camille in 1969.
Michael had undergone rapid intensification of 35 knots and 46 millibars in the 24 hours up to landfall, benefiting from ideal development conditions — minimal wind shear and a warmer-than-usual Gulf of Mexico with sea surface temperatures one to two degrees Celsius above average. Its intensification was relentless right up to landfall and resulted in catastrophic damage in portions of coastline along Florida Panhandle.
Prior to landfall, more than half a million people were under evacuation orders, and more than 20 million people in five states were under either a hurricane or tropical storm warnings.
In its short life, Hurricane Michael has certainly developed quickly — it only achieved tropical storm status just four days ago on Sunday, October 7. And now, according to the latest bulletin from the National Hurricane Center (NHC), as at 12:00 UTC today, Michael has strengthened further, into an extremely dangerous Category 4 major hurricane, with maximum sustained wind speeds of 145 miles per hour (233 kilometers per hour).
The 09:00 UTC NHC bulletin placed Michael at about 140 miles (225 kilometers) south-southwest of Panama City, Florida, tracking north at 13 miles per hour (20 kilometers per hour). Hurricane-force winds currently extend outward up to 45 miles (75 kilometers) from the center and tropical-storm-force winds extend outward up to 185 miles (295 kilometers). According to the latest RMS HWind Forecast Storm Track Probabilities and Deterministic Scenarios chart (pictured below), Panama City has a 95 percent probability of the center of Michael passing within 50 miles.
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.
India is an agricultural powerhouse, ranked second in the world in terms of its level of agricultural output. With 58 percent of the rural population of India reliant on agriculture for their livelihood (and a total figure of 2.2 billion across Asia) plus more than fifty percent of total working population of India employed in the food industry, ensuring that farmers are resilient and can rebuild after crop setbacks is a top priority for the country.
This challenge is being tackled. For India, agricultural insurance schemes such as Pradhan Mantri Fasal Bima Yojana(PMFBY) are ambitious, continually pressing to reduce the protection gap, with a target to cover 50 percent of gross cropped area over the next couple of years. But the challenge to further close this gap continues, and it was central to the theme for the Fifth Asia Agriculture Insurance Conference recently held in New Delhi — entitled “The Future of Agro Insurance: The Impact of Climate Change, Technology and Inclusive Insurance.”