Category Archives: Severe Convective Storm

“We Can’t Control the Catastrophic Events. But We Can Control How We Deal With Them.”

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Standard and Poors (S&P) has been providing ratings for insurance carriers since 2005 by examining their risk management practices. They view effective Enterprise Risk Management (ERM) as a supporting pillar of their rating analysis, as ERM reaches across all the core attributes of a business.

This includes a carrier’s treatment of catastrophic events, and their preparation for the “unexpected”, with S&P laying out a method for carriers to establish best practices in this area. And, according to their recent findings, they concluded that carriers with stronger ERM programs weathered the 2017 natural catastrophes better than those with weaker programs.

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U.S. Severe Convective Storm Claims Going Through the Roof

During the development of the current RMS U.S. Severe Convective Storm (SCS) model, we found that claims for U.S. Personal lines were growing much faster than general economic inflation. To update SCS claims trends and to try and understand what could be driving this hyper-inflation, we analyzed the new five-year dataset from 2013 onwards, and also a longer duration 17-year period from 2001 to 2017 when observation datasets are of best quality.

Trends in SCS Event Costs

We gathered SCS losses due to hail, tornado and straight-line wind sub-perils from all the information we have on U.S. client claims, which amounts to over one million claims and several billions of U.S. Dollars in total loss. Figure One below shows the time-series of annual SCS loss totals and the decomposition into claim frequency and severity for the period 2001 to 2017. The 7.5 percent per annum trend in claim severity and 3.3 percent per annum rise in frequency combine to produce a growth of total loss, or SCS claims inflation of 11 percent per annum over the 2001-2017 period.

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Five Years After Andreas: The Event That Changed the Severe Convective Storm Risk Landscape in Europe

July 2013, and Central Europe was just recovering from severe floods during May and June when a series of severe convective storms surprised the (re)insurance industry. On July 28, hailstorm Andreas hit the Stuttgart region in southern Germany, causing widespread damage to property and automobiles. Andreas is also especially remembered as hailstorm Bernd hit the north of Germany the day before on July 27.

Overall, those two events caused approximately US$4 billion in insured losses to the (re)insurance industry. This was the highest insured loss during 2013, and the largest severe convective storm insured loss ever recorded in Europe; above Munich in 1984 (equivalent to US$5.4 billion overall and US$2.7 billion insured loss in today’s value) and Hilal in 2008 (US$1.5 billion insured).

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Tornadoes in Europe

On March 12, 2018, an EF2 tornado struck the Italian city of Caserta, located about 30 kilometers (18 miles) north of Naples. The tornado caused damage to cars, buildings, and road infrastructure, with 15 people reported injured.

Figure 1: A tornado hits Caserta, Italy, March 12, 2018. Image source: www.meteoservice.net

This was a classical supercellular tornado. This type of tornado forms in a specific type of supercellular thunderstorm, which has the peculiarity of having a vortex of rising air inside — called a mesocyclone, and this is where tornadogenesis starts. Rainfall in the thunderstorm produces a downdraft, called rear-flank downdraft (RFD) in this case, which enters the mesocyclone from the back. The combined updraft (from the mesocyclone) and downdraft (from the RFD) create a tornado.

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Europe Severe Convective Storm: Hail on the Agenda

When a hail event lasting just minutes hit southern Germany on July 28, 2013, it generated a US$3.9 billion insured loss. Some 80,000 buildings and tens of thousands of automobiles were damaged — many severely. Such a high hail loss was unprecedented in Europe. It was this event that represented the wake-up call for the insurance and reinsurance industry to think harder about the risk due to severe convective storms.

I had the privilege to lead my team of seven modelers from RMS as we attended the ninth European Conference on Severe Storms (ECSS) which took place between September 18-22 this year in Pula, Croatia. This biannual conference sees hundreds of scientists predominantly from Europe and the U.S. but also from other parts of the world. Hail was prominent on the event agenda among the scientific community, and with rising interest in hail damage there is now also a considerable participation from the reinsurance industry. Munich Re is the main sponsor of the conference.

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What Should We Make of the U.S. Severe Convective Storm (SCS) Season So Far?

After a blistering start to the 2017 U.S. severe weather season in which tornado, hail, and wind reports were at near or record levels of activity through to March, recent months have been closer to normal. As of early July, overall observations are still above the 10-year running average (2005-2015), but they’re slowly falling back into the expected bounds.

Nevertheless, the events that have occurred have certainly left their mark on the (re)insurance industry. Total U.S. insured losses from SCS events during the first quarter of 2017 (January-March) were $5.7 billion, the highest in the last 18 years. As of early July, losses were estimated to be greater than $14 billion, marking the tenth consecutive year that SCS insured losses have exceeded $10 billion.

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Severe Convective Storm Season Starts in Europe

Michèle Lai, Product Manager, RMS

Contributors: James Cosgrove, Analyst – Event Response, RMS; Juergen Grieser, Director, RMS

The European severe convective storm (SCS) season has kicked off. The heatwave that scorched the continent for the best part of a week set the ideal conditions for deep convection. I am based at the RMS Zürich office, and as everyone enjoyed this heatwave, cooling off by going swimming after work, the potential risk of thunderstorms was never too far from our minds.

The season started with a series of supercells hitting France on June 13 and June 15, continued Thursday, June 22 in Germany and then moved on towards eastern Europe.

Although usually less severe than their U.S. counterparts, SCS in Europe can produce extensive losses, such as Andreas in 2013 with EUR 2.9 billion insured losses (2013 USD $3.9 billion) and Ela in 2014, EUR 2 billion insured losses (2014 USD $2.2 billion).

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Is Europe Due for Severe Hailstorms this Summer?

Summer has just started, but weather has already been warm over Europe. Many countries have experienced very high temperatures over the first weeks of June, and there is a chance the 2014 summer will be warmer than normal. A warm atmosphere can bring very high convection potential and potentially lead to a busy severe convective storm season. While seasonal forecasts are uncertain, severe hail events already experienced in June already point to a potential increase in hail risk this year.

The first noticeable hailstorm of the season hit Germany, France, and Belgium between June 7 and 9. Over that period, southern air masses were very warm and clashed with much cooler air from the north. This frontal system brought heavy local wind, rain, and hail, especially over the north of France, Belgium, and northwest region Germany, where large cities like Essen, Düsseldorf, or Köln experienced property damages and six casualties.

RMS scientists Dr. Navin Peiris and Panagiotis Rentzos led a reconnaissance survey in the region a few days after the event and noted that even if there was some evidence of direct hail damage to roofing, most of the substantial damages and transport disruption around Düsseldorf came from tree falls due to very strong wind gusts.

Tree Fallen in Hailstorm

July 12, 2014 will be the 30th anniversary of the most expensive hailstorm in the history of Germany, which generated losses around US$2 billion 1984—half of which was insured. The hailstorm developed amid a streak of late afternoon thunderstorms after a day of intense solar heating. A mass of moist sea air flowed into southern Germany overnight and the combination of moisture and rising air triggered a rapidly intensifying thunderstorm system over the Swiss Mittelland that propagated eastward. Hail fell within a 250-kilometer (150-mile) long and 5–15 kilometer (3–9 mile) wide swath from Lake Constance to eastern Bavaria near the Austrian border. At around 8 p.m. local time, the hailstorm passed over Munich, damaging approximately 70,000 houses, 200,000 cars, 150 aircraft, and most agricultural crops within the storm’s path. More than 400 people were injured. Over half of the insured losses were attributed to damaged cars.

July also marks the first anniversary of the 2013 German hailstorm, which caused insured losses of US$3.4 billion, the second highest from a single natural catastrophe in 2013. Like the June 2014 events, the storm hit after a prolonged period of above-average temperatures in central Europe. The first hail event hit northern Germany on July 27, and the second dropped hailstones with a diameter of up to 8 cm (3.1 in) over south Germany the next day.

Interestingly, all these major events occurred in regions with very high potential of hail damage, which can be described in catastrophe models such as the RMS HailCalc model in terms of kinetic energy to help better manage hail risk. In June, RMS presented the first results of a reconstruction of this hailstorm on at the 1st European Hail Workshop. The paper illustrates how a fast estimation of insured hail losses could be obtained following an event in the future. Developing methods of estimating insured loss totals and return periods immediately after an event are an ongoing area of research in the insurance industry, as illustrated in the RMS paper and others at the workshop.

Hailstorm Image Map

 

One Year Later: What We Learned from the Moore Tornadoes

This week marks the one-year anniversary of the severe weather outbreak that brought high winds, hail, and tornadoes to half of all U.S. states. The most damaging event in the outbreak was the Moore, Oklahoma tornado of May 20, 2013. Rated at the maximum intensity of EF5, it had maximum sustained wind speeds of up to 210 mph and was the most deadly and damaging tornado of the year for both Oklahoma and the U.S., causing roughly $2 billion in insured losses.

As we reflect upon the events that have taken place in Moore, the following can be discerned:

  • Understanding severe weather risks is key: According to the RMS U.S. Severe Convective Storm Model in RiskLink 13.1, the annual likelihood of a severe weather event causing at least $1 billion in insured losses in the U.S. is 92 percent, meaning it is almost certain to occur each year. For reference, from a loss perspective, the $2 billion 2013 Moore tornado loss represented a 1-in-50-year event in Oklahoma, or an event with a 2 percent chance of occurring in a given year. Similarly, a 1-in-100-year event, or an event with a 1 percent chance of occurring in a given year, would cause $4 billion or more in insured losses for Oklahoma. Events in excess of the 1-in-100-year return period would be driven by large, destructive tornadoes hitting more concentrated urban environments, such as a direct hit on Oklahoma City. Probabilistic severe storm models provide more perspective on these types of risks, and can better prepare the industry for the “big ones.”
  • What grabs the headlines doesn’t cause the most damage: Although tornadoes get all the news coverage and are often catastrophic, hail drives roughly 60 percent of the average annual loss in convective storms. This is mainly driven by the much higher frequency of hailstorms compared to tornadoes. Hailstorms also have a much larger average footprint size.
  • Tornado Alley isn’t the only risky place: Tornado Alley drives roughly 32 percent of the average annual loss for severe convective storms in the U.S., while the Upper Midwest drives 24 percent, Texas drives 16 percent, and the Southeast drives 12 percent. Buildings in affected areas need continued upgrades: For example, the Moore city council approved 12 changes to the residential building code after the Moore tornado, including mandates for continuous plywood bracing and wind-resistant garages (often the first point of failure during weak to moderate winds).

While we can never predict exactly when severe weather will occur, it’s imperative for communities, businesses, and individuals to understand its potential impact. Doing so will help people and industries exposed to severe weather be better prepared for the next big event.

Are you located in one of the regions affected by last May’s outbreak, or in another risk-prone area? Have you been affected by any recent severe weather events? If so, what did you learn, and what changes were made in your region to safeguard the community, businesses, and homes? Please share your experience in the comment section.

Jeff Waters also contributed to this post.

What Disaster Models Tell Us About U.S. Tornado Risk

This week’s deadly tornadoes in the South cut a swath of devastation through several states. The disaster also brought a shattering end to what had been a relatively quiet start to the usual peak U.S. tornado period. We asked Matthew Nielsen, director of RMS model product management, about the company’s tornado models and what they say about the rest of this year’s tornado season.

Q: What did RMS modeling reveal going into the 2014 tornado season?

Nielsen: RMS modeling revealed the elevated risk found in areas of the Southeast, specifically the heightened tornado risk from long-track storms. We tend to find that while the frequency of tornadoes in states like Alabama, Arkansas, and Mississippi is not as high as states in the Tornado Alley, the tornadoes that do occur in these states tend to persist much longer on the ground and affect more exposure.

Q: What is the general financial and economic impact of tornadoes as compared to other catastrophes?

Nielsen: Tornadoes tend to have very high damage ratios, meaning that most locations in its path will suffer extreme to total damage. If a tornado hits an exposure center with high-value commercial or industry risks, losses can easily pass the $1 billion mark. While tornadoes tend to have much smaller and more focused paths than hurricanes, they can inflict heavy losses to the exposure they affect, and have historically been known to cause losses in excess of $2 billion to $3 billion for a single tornado track.

Q: What has made the current tornado outbreak span multiple days and multiple regions?

Nielsen: The current outbreak has persisted for several days over a very similar region due to the very slow moving nature of the low-pressure system. This is also related to the persistence and stubbornness of the atmosphere this season. Given the overlapping areas of intense thunderstorms over the last few days, flash flooding is becoming more of an issue due to repeated periods of intense rainfall.

Q: Based on the information available, what’s in store for the rest of the season after having a slow start but recently picking up steam?

Nielsen: On one hand, the storm door may now be open, and we could see a very active May. We are now reaching the climatological peak of the severe convective storm season; May is typically the highest activity month in the U.S. The overall weather pattern over North America has been very stubborn and persistent this year, as we saw with the frequency and duration of cold weather over the eastern half of the continent, and warm, dry weather over the west coast. It is possible that activity may continue at this heightened pace for several weeks.

Conversely, given how quickly it went from active to inactive over the last week, it could also transition back to a relatively quiet phase for the next few months. There is a lot of uncertainty as to how the rest of the season may play out.

As the season progresses, we should start seeing more activity over the traditional Tornado Alley states, with less activity over the Southeast U.S. Activity this time of year is usually more focused around the southern Plains states like Oklahoma, Kansas, and Texas. Arkansas, Alabama, and Mississippi usually experience their activity peaks in the late winter to early spring months of February and March.

Matthew Nielsen. Director, Model Product Management, RMS

Matthew Nielsen. Director, Model Product Management, RMS

Matthew is a meteorologist and geographer with extensive experience in catastrophe risk in North America. At RMS, he is responsible for the development of the RMS climate-peril models for the Americas, including the severe-convective storm, winter storm, flood, wildfire and hurricane models. He has conducted field reconnaissance for major catastrophes including Hurricane Katrina in 2005, the Greensburg tornado in 2007, the Tuscaloosa-Birmingham tornado in 2011 and Hurricane Sandy in 2012.  Matthew has been instrumental in regulatory outreach for RMS in the U.S. He liaises regularly with regulators in 15 states to establish open channels of communication about the use of RMS models and solutions. Prior to RMS, Matthew was a graduate research assistant at the Cooperative Institute for Research in the Atmosphere (CIRA) where he authored a thesis on remote sensing in satellite meteorology.  

Matthew holds a master’s degree in atmospheric science from Colorado State University and a bachelor’s degree in physics from Ripon College, where he won the Henry Knop Award in Physics. 

He is a member of the American Meteorological Society (AMS), the International Society of Catastrophe Managers (ISCM), and the American Association of Geographers (AAG).