ICLR: Global change and catastrophic loss

transcript

Global changes and catastrophic loss Glenn McGillivray Managing Director Institute for Catastrophic Loss Reduction November 2014

Mission - reduce loss of life and property caused

by severe weather and earthquakes

Created in 1997 by the insurance community to

confront rising disaster losses

Multi-disciplinary research and education

provides an essential foundation for ‘science to

action’

30 scientists / 100+ students / 12+ universities /

350+ research papers / $50+ million in research

University of Western Ontario affiliated

In the media

ICLR board Kathy Bardswick (Chair)

President & Chief Executive Officer, The Co-operators Group

Barbara Bellissimo

Chief Agent & Senior Vice President, State Farm Canada

Charmaine Dean

Dean of Science, Western University

Louis Gagnon

President, Service & Distribution, Intact Insurance

Andrew N. Hrymak

Dean, Professor, Chemical and Biochemical Engineering,

Western University

Paul Kovacs

Executive Director, Institute for Catastrophic Loss Reduction

Sharon Ludlow

President, Aviva Insurance Company of Canada

Brian Timney

Dean of Social Science, Western University

Considerations

Disasters are a serious threat

Losses are rising. Why?

What can be done about it?

Number of cat. events 1970-2013

1970 1975 1980 1985 1990 1995 2000 2005 2010

Source: Swiss Re, sigma

Insured losses 1970-2014(1H)

1970 1975 1980 1985 1990 1995 2000 2005 2010

Source: Swiss Re, sigma

USD billion at 2005 prices USD billion at 2005 prices Minimum selection criteria:

Total losses USD 89.2 m

Insured property claims

Shipping: USD 19.3 m

Aviation: USD 38.6 m

Other: USD 48.0 m

Casualties

Dead or missing: 20

Injured: 50

Homeless: 2 000

$19 billion

Insured losses by peril

CLIMATE RELATED

EARTHQUAKES VOLCANOES

GEOPHYSICAL Earthquake, volcanic eruption

METEOROLOGICAL Severe weather, winter & tropical storms, hail, tornado

HYDROLOGICAL River & flash flood, storm surge, landslide

CLIMATOLOGICAL Heatwave, freeze, wildland fire, drought

Number of victims 1970-2013

10,000

100,000

1,000,000

1970 1975 1980 1985 1990 1995 2000 2005 2010

Natural catastrophes Man-made disasters

Left hand scale: logarithmic. Source: Swiss Re, sigma No 2/2006

Storm in

Bangladesh

Earthquake in Peru

Earthquake

Tangshan, China

Cyclone

Gorki,

Bangladesh

EQ, tsunami

Indian

Global disaster damage

1960s 1970s 1980s 1990s 2000s 2010s(TD)

Annual insurance disaster claims, billions, adjusted for inflation

20+ fold increase since

1970s!

Canadian catastrophes

World risk index

Canadian disaster damage

Number of events

1960s 1970s 1980s 1990s 2000s

Meteorological - Hydrological Geological

10 killed/100 evacuated/community

assistance required/historically

significant/community unable to recover on

its own

Based on data from the Canadian Disaster Database, Public Safety Canada

Primary concern rests with flood and earthquake (the latter on the west coast and the Ottawa/Montreal corridor)

Many instances of flood, few of EQ Though when (not if) a major earthquake strikes

the west coast, damage will likely be severe 13 great earthquakes along this fault in the last

6,000 years Five richter 7+ events in the last 130 years in

southwest B.C. and northern Washington state Seattle earthquake, February 28, 2001, R 6.8 Will happen again, just a matter of when Are we ready?

EQ scenarios

Hurricanes seldom impact Canada

Usually just remnants when they do hit Biggest concern is on the east coast

Forest fire becoming a concern as developments

grow and interface with wildlands

Tornado risk also increasing due to growing

development

Misc. risks such as ice storm, blizzard, hail etc.

Canadian cats 2009

Winter storms in eastern Canada (Feb. 2)

$25 million

Hamilton rain (July 26)

$100- to $150 million

Alberta wind etc. (August 2-3)

$500 million

Mont Laurier tornado (August 4)

$6 million

Manitoba hail etc. (August 13-15)

$50- to $75 million

Ontario tornadoes (August 20)

$50- to $100 million

Tropical storms Bill & Danny (August 23 & 29)

$10 & 25 million

Source: Aon Benfield (Canada)

Canadian cats 2010

Saskatchewan storms (Spring)

Leamington & Harrow tornadoes (June 6)

Midland tornado (June 23)

Calgary hailstorm (July 12)

>$400 million

Hurricane Igor (September 21)

Canadian cats 2011

Storms in Ontario & Quebec (March)

Storms in Ontario & Quebec (April)

Wildfire in Slave Lake, Alberta (May 15)

$700 million

Flooding in Saskatchewan, Manitoba, Quebec (Spring)

Hail, tornadoes and wind in Alberta, Man. & Sask. (July

18/19)

Tornado in Goderich (August 21)

Hurricane Irene (August 28 to 30)

Alberta windstorm (November 27)

Canadian cats 2012

Flooding and wind in Ontario and Quebec (May 26 to 29)

Flooding, wind and hail in Alberta (July 12)

Flooding, wind and hail in Ontario (July 23)

Hail and wind in Alberta (July 26)

Flooding, wind and hail in Alberta (August 12)

Canadian cats 2013

Two small events early in the year

Southern Alberta flood (June 19-21)

$1.7 billion

GTA flood (July 8-9)

$940 million

Ontario/Quebec storm (July 19)

Ontario/Quebec/Atlantic ice storm (December 22-26)

$200+ million

High River, Alberta, Canada

June 23, 2013

Trans-Canada Highway, Alberta

Calgary, Alberta, Canada

>$1.7 billion insured damage

Courtesy of Kim Sturgess, WaterSMART AB, 2014

June, 1929

Toronto, Canada

>$850 million insured damage

Toronto, Ontario

$225 million insured damage

2013 high water marks

Canada’s costliest and third costliest insured

loss events within two weeks of each other

Ice storm now the second costliest – took 15

years!

Two billion dollar natural catastrophes in

one year – a first!

Second place event (Slave Lake) fell not

one, but two notches to fourth place

5th consecutive year of billion-dollar events

Canadian cats 2014

Angus tornado (June 17)

>$30 million

Saskatchewan & Manitoba storms (June 28)

Ontario storms/Burlington flood (August 4)

$90 million

Alberta wind & thunderstorms (August 7 & 8)

$450 million

$652 million (first eight months)

Burlington, Ontario

Aidrie, Alberta hailstorm

Billion-dollar years

1998 – due solely to the ice storm

2005 – due greatly to the August 19 GTA rainstorm

2009 – due greatly to back-to-back windstorms in Alberta

2010 – due greatly to large hailstorm in Alberta

2011 – due greatly to Slave Lake wildfire

2012 – due greatly to one large and two smaller hailstorms

in Alberta

2013 – due to the Southern Alberta flood and GTA flood

First time ever for two billion-dollar events

Avg. difference between loss ratios

(Auto vs. personal property)

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

1983-1992 1993-2002 2003-2012

New normal

“The Institute for Catastrophic Loss

Reduction (ICLR) reports that large

insured losses from extreme weather

appear to be ‘the new normal’ for the

Canadian insurance industry, expecting

that large-loss years will no longer be

rarities.”

Canadian Underwriter (November 6, 2012)

When the feds say we have a problem…

”The rising cost of natural disasters and

the financial burden on Ottawa is the

country’s biggest public safety risk”…

Public Safety Canada, 2013/14, Report on Plans and Priorities

Why are losses rising?

More people and property at risk

Aging infrastructure

The climate is changing

Global population

Canadian urban population

Residential structures

Source: ICLR, based on data from Statistics Canada

Motor vehicle registration

Increasing values in exposed areas

Ocean Drive, FL, 1926. Ocean Drive, FL, 2000.

The number of residents in Florida increased by 70% between 1980

and 2001. In the same period, the state’s gross domestic product

soared by 130%.

Infrastructure spending

Source: ICLR, based on data from Statistics Canada

Source: Federation of Canadian Municipalities

Global Warming, 1884 – 2011

Difference from 1951 – 1980

Average

- 2° C + 2° C 0° Source: NASA Goddard Space Flight Center Scientific Visualization Studio

TELLING THE WEATHER STORY | 60

0 100,000 200,000 300,000 400,000

Years Before Present

NOW 400K YEARS AGO

ICE AGES

WARM PERIODS

-(5-7°)

0 STUDYING THE HISTORY TELLS US: • Warming since last Ice Age was about 5-7oC over

10,000 years; • Projected global warming over the next 100 years

is 2-4oC; • The rate of warming will be about 50 times faster.

HOW BIG A CHANGE IS 3-5°C OVER 100 YEARS?

2013 was the 37th

consecutive year with a

global temperature above

the 20th century average

September 2014 was the

355th consecutive month

with a global temperature

above the 20th century

average

800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0

Age (years BP)

Source: National Climatic Data Center, NOAA

800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0

Age (years BP)

2013 CO2 Concentration: 400

800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0

Age (years BP)

2013 CO2 Concentration: 400 400

800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0

Age (years BP)

After 40 more years at the current rate of increase

There are longer intervals in

drought-stricken areas

between downpours, making

droughts EVEN WORSE

More water also evaporates

MORE QUICKLY from the

soil, making DROUGHTS

deeper and longer still

Causing Bigger, Harder Downpours, and

Simultaneously—

Evaporation from

the ocean into the

atmosphere increases

even MORE

As the air gets even

warmer, it can hold

even MORE water vapor

Heavy downpours get

even heavier, causing

worse flooding

Snowpacks melt earlier in

the year, leading to more

spring flooding, but less

water in the heat of summer

There are longer intervals in

drought-stricken areas

between downpours, making

droughts EVEN WORSE

More water also evaporates

MORE QUICKLY from the

soil, making DROUGHTS

deeper and longer still

Causing Longer and Deeper DROUGHTS

Change in annual global temperature (1880-2010)

1880 1900 1920 1940 1960 1980 2000 2010

Increase in heavy precipitation days

Source: Alexander, L. V., et al., “Global observed changes in daily climate extremes of temperature and precipitation,” J. Geophys. Res., 111, D05109,

Worldwide

Hotter Years Typically Have More Fires 40 Years of Western U.S. Fire and Temperatures

1970 1980 1990 2000 2010

Average Temperature

Number of Fires

Data: Climate Central, “The Age of Western Wildfires,” September, 2012

Colorado Springs, Colorado June 26, 2012

Waldo Canyon Fire, Colorado June 27, 2012

Black Forest, Colorado June 12, 2013

Black Forest Fire, Colorado June 11, 2013

West Fork Complex Fire, Colorado June 20, 2013

Yarnell Hill Fire, Arizona June 30, 2013

19 firefighters were killed

fighting the Yarnell Hill fire

Kelowna, B.C. September 2003

Source: Meteorological Service of Canada, Environment Canada.

Between 1975-1995 and 2080-2100, Canadian climate change model

Projected winter temperature change

“The only plausible explanation for the

rise in weather-related catastrophes is

climate change.”

Munich Re

One of the two largest reinsurance companies in the world September 27, 2010

What can be done?

Loss prevention

Risk transfer

Loss prevention

Structural measures

Non-structural measures

Public awareness

Structural measures

Dams, levees, seawalls and other engineered

structures can be effective mechanisms for

protecting communities

Building codes should reflect climate knowledge

Warning systems reduce injuries and fatalities

Structural measures - hard

Structural measures - soft

Non-structural measures

Non-structural measures are effective means to

improve the safety of how we live, study and

Land use planning has been proven to be a

powerful tool to reduce damage and injuries

Public awareness

Community actions are the most important and

effective in promoting disaster safety -- think

locally and act locally

Informed families and businesses are best able

to manage nature’s hazards

Don’t be taken by surprise

Don’t wait for it, plan for it

Canadians must establish a culture of

preparedness

Public awareness

Role of insurance

Pay disaster losses

Support research in climate extremes

Lobby for better disaster management

Promote better building practices

Provide incentives and disincentives

Through pricing

Through policy wordings/exclusions

Through refusal to bind coverage

But insurance is NOT mitigation, it is simply

passing on the bill to someone else

ICLR efforts

Three main areas of concentration

Housing

Municipal governments and cities

Small business

Hurricane Gustav

We found one house in Houma, LA with a roof failure

(city of 100,000 people). The cause of the damage was

missing toenails.

The roof flew off the left house and landed on the roof of

the right house, penetrating the sheathing.

Building codes protect homes

severe wind damage, Florida, dollars per square foot, 2004 - 2005

Three Little Pigs project at UWO

Now known as the The Insurance Research Lab for Better Homes

Institute for Catastrophic Loss Reduction Test models in wind tunnel

The concept

November 14, 2005

Current Design

Should work well for

structural tests

Problems with connections

are the major issue for

response to wind.

Roof-to-Wall Connections

Example of a toe-nail roof to wall connection in the house where the

nail has split the wood and offers very little hold down force.

Estimates of the hold down capacity of toe-nail connections on the test house

vary from 30lbf to 160lbf (based on past literature)

Every connection (roof sheathing and roof-to-wall toe-nails) in the house has

been recorded to aid in the interpretation of the experimental data and to aid

computational modeling.

These data will be used for the development of probabilistic failure (risk)

models

A typical toe-nail roof to wall connection in the test house

After Dynamic Test #3

During House Construction

Crack in wood didn’t grow

Nails moved a lot!

Air gap

WindEEE Dome

Tornado wind damage surveys

Post-storm wind damage investigations

Team of UWO researchers, partially funded by ICLR, ready to

go to southern Ontario tornado damage sites at a moment’s

notice

Went to one event in 2007, near Mitchell, Ontario in May

Caused approx. CAD 1 million in damage

One house severely damaged, focused on it

Observe damage and measure wind throw of debris to attempt

to determine wind speed

Use models and the wind tunnel at UWO

One of the most common problems found is improper attention

to detail for connections, such as missed nails.

Bornham, Ontario, May 2007

from here

Elie, Manitoba tornado

June 22, 2007

Canada’s first F5 tornado

car ‘missing’ house

same car

MISSING hold-downs

Vaughan, Ont. tornadoes

August 20, 2009

Two F-2s

Missing roof-to-wall

connections.

Roof likely lifted and wall fell

outwards

Debris impact – internal pressurization – roof

failure

Debris impact – internal pressurization – roof

failure

Debris impact – internal pressurization – roof failure ??

This one, we are not sure about - it could have been that the

double doors blew in…

This air conditioner

unit travelled 70m

Nothing was holding them

down… except their own

weight

Sheathing without enough fasteners …

not even the shingles came off here

Edge nails seem to have less capacity due to pull-

through

Goderich, Ontario tornado

August 21, 2011

F3 tornado

Angus, Ontario tornado

June 17, 2014

EF2 tornado

Designed…for safer living

“Better than building code”

First home launched at West Point, P.E.I. in November 2006 Impact-resistant windows rated for high wind pressures;

1” thick steel rods that anchor the floors together, including between the first floor to the foundation;

Steel braces securing the trusses to the framing, and braced gable ends to withstand high winds;

Special shingles designed to meet 200 km/h standards, installed using additional nails and cement;

Heavy roof sheathing designed to stay dry, fastened with ring-shank nails in a tight nailing pattern;

Water-resistant sealing around windows and doors;

Adhesive weather-resistant strips installed over every joint in the roof sheathing to protect against water intrusion; and

Special wind-resistant siding, fascia and soffits.

Second home launched in Sudbury, Ont. Feb. 19., 2007

Third home currently under construction in Fort Erie

Showcase Homes

Retrofit an existing home to make it more resilient to natural hazards which exist in a given area

May 2008, retrofitted a home in Montreal to make it more resilient to earthquake and winter storm: Installed a diesel generator as an alternative power source

Put in surge protection on bigger-ticket electronic items

Fit the meter with a natural gas seismic shut off valve

Anchored cabinets, office equipment, and bedroom furniture to walls

Outfitted the washing machine with armoured water supply hoses

Anchored the hot water heater to the floor

Secured pictures and mirrors to the walls

Applied 3M Scotchshield safety UV film to windows

Installed carbon monoxide and smoke detectors and providing a fire extinguisher

Installed snow melt cables on roof edges and gutters to prevent the formation of ice dams

Provided a disaster preparedness kit.

Showcase Homes

London - tornado (2003)

Halifax - hurricane (2004)

Vancouver - earthquake (2005)

Ottawa - winter storm (2006)

Edmonton - tornado (2007)

Montreal - ice storm (2008)

Toronto - winter storm/blackout (2009)

North York - basement flooding (Aug. 19, 2009)

Jasper - wildfire (2010)

Hamilton - basement flooding (2011)

Moncton – basement flooding (2012)

Quebec – earthquake and winter storm (2013)

Burlington (2014)

Building code work

ICLR/UWO NBC/NPC submissions

2012 NBC/NPC submissions

Clarify sewer backflow

protection requirement

Align wall and roof sheathing

fastening requirements

Bracing to resist lateral wind

Clarify connection of foundation

drainage to sanitary/storm

Clarification of requirements for

anchoring columns and posts

Thank you!

gmcgillivray@iclr.org

www.iclr.org

www.basementfloodreduction.com

Twitter: @iclrinfo

ICLR: Global change and catastrophic loss

Education