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Windstorms and Insured Windstorms and Insured Loss in the UKLoss in the UK
RMetS Scottish Centre Postgraduate Student Evening 12 January 2007
Richard Hewstonr.hewston@uea.ac.uk
University of East Angliahttp://www.uea.ac.uk/~e470848/
Supervisors: Dr Stephen Dorling Dr David Viner
(University of East Anglia)
Funding: Worshipful Company of Insurers
OutlineOutline
1.1. Weather and economic lossWeather and economic loss
2.2. An example of a destructive An example of a destructive European windstorm – Windstorm European windstorm – Windstorm Erwin (Jan 2005)Erwin (Jan 2005)
3.3. Assessing and Modelling RiskAssessing and Modelling Risk
4.4. A windstorm model for the UKA windstorm model for the UK
5.5. Climate Change and Future lossesClimate Change and Future losses
OutlineOutline
1.1. Weather and economic lossWeather and economic loss
Worldwide Natural Worldwide Natural CatastrophesCatastrophes
Increasing economic and insured lossIncreasing economic and insured loss Since 1970, of the most expensive 40 insured losses, 33 were Since 1970, of the most expensive 40 insured losses, 33 were
weather related with 29 windstorm related.weather related with 29 windstorm related. Successive record annual insured losses in 2004 and 2005Successive record annual insured losses in 2004 and 2005
Source: Munich Re (2006)
Worldwide Natural Worldwide Natural CatastrophesCatastrophes
Increasing economic and insured lossIncreasing economic and insured loss Since 1970, of the most expensive 40 insured losses, 33 were Since 1970, of the most expensive 40 insured losses, 33 were
weather related with 29 windstorm related.weather related with 29 windstorm related. Successive record annual insured losses in 2004 and 2005Successive record annual insured losses in 2004 and 2005
Source: Munich Re (2006)
Worldwide Natural Worldwide Natural CatastrophesCatastrophes
Increasing economic and insured lossIncreasing economic and insured loss Since 1970, of the most expensive 40 insured losses, 33 were weather related with Since 1970, of the most expensive 40 insured losses, 33 were weather related with
29 windstorm related.29 windstorm related. Successive record annual insured losses in 2004 and 2005Successive record annual insured losses in 2004 and 2005
The trend exhibited is influenced by economic and The trend exhibited is influenced by economic and demographic shifts and well as natural factors.demographic shifts and well as natural factors.
Source: Munich Re (2006)
Weather Related Insured Loss Weather Related Insured Loss in the UKin the UK
~70% of all losses associated with storms~70% of all losses associated with storms ~30% of all losses associated with ~30% of all losses associated with
SubsidenceSubsidence
Weather Related Insured Loss
0
500
1000
1500
2000
2500
3000
3500
4000
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005Year
£m (
adju
sted
to
200
5 £
valu
es)
Total
Weather Related Insured Loss Weather Related Insured Loss in the UKin the UK
Domestic claims make up 70-85% of total Domestic claims make up 70-85% of total losseslosses
Business Interruption accounts for ~12% of Business Interruption accounts for ~12% of commercial claims (~3% of total weather commercial claims (~3% of total weather related insured loss)related insured loss)
Weather Related Insured Loss
0
500
1000
1500
2000
2500
3000
3500
4000
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005Year
£m (
adju
sted
to
200
5 £
valu
es) Commercial
Total Domestic
Total
Weather Related Insured Loss Weather Related Insured Loss in the UKin the UK
~50% of domestic insured loss is related to ~50% of domestic insured loss is related to windstormswindstorms
Weather Related Insured Loss
0
200
400
600
800
1000
1200
1400
1600
1998 1999 2000 2001 2002 2003 2004 2005
Year
£m
(a
dju
ste
d t
o 2
00
5 £
va
lue
s)
Domestic (Storm)
TOTAL
Weather Related Insured Loss Weather Related Insured Loss in the UKin the UK
4th quarter 2000 - Wettest Autumn for more than 200 years
Weather Related Domestic Property Insured Loss
0
100
200
300
400
500
600
700
800
900
1997
Qtr
4
1998
Qtr
1
1998
Qtr
2
1998
Qtr
3
1998
Qtr
4
1999
Qtr
1
1999
Qtr
2
1999
Qtr
3
1999
Qtr
4
2000
Qtr
1
2000
Qtr
2
2000
Qtr
3
2000
Qtr
4
2001
Qtr
1
2001
Qtr
2
2001
Qtr
3
2001
Qtr
4
2002
Qtr
1
2002
Qtr
2
2002
Qtr
3
2002
Qtr
4
2003
Qtr
1
2003
Qtr
2
2003
Qtr
3
2003
Qtr
4
2004
Qtr
1
2004
Qtr
2
2004
Qtr
3
2004
Qtr
4
2005
Qtr
1
2005
Qtr
2
2005
Qtr
3
2005
Qtr
4
Quarter
Ins
ure
d L
os
s (
£m
)(F
igu
res
ad
jus
ted
to
20
05
va
lue
s)
Total
Storm
Weather Related Insured Loss Weather Related Insured Loss in the UKin the UK
4th quarter 2000 - Wettest Autumn for more than 200 years
1st quarter 2005 due largely to windstorm Erwin
Weather Related Domestic Property Insured Loss
0
100
200
300
400
500
600
700
800
900
1997
Qtr
4
1998
Qtr
1
1998
Qtr
2
1998
Qtr
3
1998
Qtr
4
1999
Qtr
1
1999
Qtr
2
1999
Qtr
3
1999
Qtr
4
2000
Qtr
1
2000
Qtr
2
2000
Qtr
3
2000
Qtr
4
2001
Qtr
1
2001
Qtr
2
2001
Qtr
3
2001
Qtr
4
2002
Qtr
1
2002
Qtr
2
2002
Qtr
3
2002
Qtr
4
2003
Qtr
1
2003
Qtr
2
2003
Qtr
3
2003
Qtr
4
2004
Qtr
1
2004
Qtr
2
2004
Qtr
3
2004
Qtr
4
2005
Qtr
1
2005
Qtr
2
2005
Qtr
3
2005
Qtr
4
Quarter
Ins
ure
d L
os
s (
£m
)(F
igu
res
ad
jus
ted
to
20
05
va
lue
s)
Total
Storm
OutlineOutline
1.1. Weather and economic lossWeather and economic loss
2.2. An example of a destructive An example of a destructive European windstorm – European windstorm – Windstorm Erwin (Jan 2005)Windstorm Erwin (Jan 2005)
Windstorm ErwinWindstorm Erwin Struck Northern Europe 7-9Struck Northern Europe 7-9thth January 2005 January 2005 Torrential rain and gale force windsTorrential rain and gale force winds One of the most severe storms to hit Northern Europe One of the most severe storms to hit Northern Europe
in the last 15 yearsin the last 15 years
Source: Met Office (2005)
Windstorm ErwinWindstorm Erwin
Evidence of a “Sting Jet”Evidence of a “Sting Jet” Propagates strong winds from above to the ground Propagates strong winds from above to the ground Distinct from the usual strong wind region associated Distinct from the usual strong wind region associated
with the warm conveyor belt and main cold frontwith the warm conveyor belt and main cold front
Most damage is associated with this featureMost damage is associated with this feature
Windstorm ErwinWindstorm Erwin
Wind at altitude of 9km for 1800GMT on 7th January, 2005
Source: Danish Met Institute
Windstorm ErwinWindstorm Erwin Insured lossesInsured losses
UK ~£250mUK ~£250m Denmark ~£400mDenmark ~£400m Sweden ~£230mSweden ~£230m
Sweden recorded Sweden recorded windspeeds of 33m/s windspeeds of 33m/s inland, resulting in inland, resulting in unprecedented damage unprecedented damage to the forest industry to the forest industry (£1.6-2.3bn)(£1.6-2.3bn)
Industry wide, the figure Industry wide, the figure for total insured losses for total insured losses relating to Windstorm relating to Windstorm Erwin stands at £1.1bnErwin stands at £1.1bn
Wind at altitude of 9km for 1800GMT on 7th January, 2005
Source: Danish Met Institute
OutlineOutline
1.1. Weather and economic lossWeather and economic loss
2.2. An example of a destructive European An example of a destructive European windstorm – Windstorm Erwin (Jan 2005)windstorm – Windstorm Erwin (Jan 2005)
3.3. Assessing and Modelling Assessing and Modelling RiskRisk
Assessing RiskAssessing Risk
Crichton, D. (1999). The Risk Triangle, Natural Disaster Management. Journal, Ingleton. London, Tudor Rose: 102-103.
Risk Risk TriangleTriangle
Source: Crichton (1999)
Exposure – position, orientation, regional terrain, topography
Vulnerability - shape, constructional details and state of maintenance (preparedness)
Hazard – weather event
Assessing RiskAssessing Risk
Crichton, D. (1999). The Risk Triangle, Natural Disaster Management. Journal, Ingleton. London, Tudor Rose: 102-103.
Windstorm damage is the Windstorm damage is the result of wind loads result of wind loads exceeding the resistance of exceeding the resistance of the structure, affecting the structure, affecting parts of the building such parts of the building such as roofs, envelopes and as roofs, envelopes and openings. openings. 79% of all damage since 79% of all damage since
1970 is related to roofs1970 is related to roofs
Important factor is Important factor is VulnerabilityVulnerability Different regions have Different regions have
different building different building standardsstandards
Risk Risk TriangleTriangle
Source: Crichton (1999)
Exposure – position, orientation, regional terrain, topography
Vulnerability - shape, constructional details and state of maintenance (preparedness)
Hazard – weather event
OutlineOutline
1.1. Weather and economic lossWeather and economic loss
2.2. An example of a destructive European An example of a destructive European windstorm – Windstorm Erwin (Jan 2005)windstorm – Windstorm Erwin (Jan 2005)
3.3. Assessing and Modelling RiskAssessing and Modelling Risk
4.4. A windstorm model for the A windstorm model for the UKUK
Modelling Windstorm LossModelling Windstorm Loss
Following Klawa and Ulbrich (2003)Following Klawa and Ulbrich (2003)
Windstorm loss modelling using Windstorm loss modelling using wind speeds from a network of UK Met wind speeds from a network of UK Met
Office observing stations Office observing stations various socioeconomic data sets which various socioeconomic data sets which
help to quantify vulnerabilityhelp to quantify vulnerability Claims data from insurers for Claims data from insurers for
verificationverification
Klawa, M and U. Ulbirch (2003), Klawa, M and U. Ulbirch (2003), A Model for the Estimation of Storm Losses and the Identification of A Model for the Estimation of Storm Losses and the Identification of Severe Winter Storms in GermanySevere Winter Storms in Germany, Natural Hazards and Earth Systems Sciences, Vol. 3, pp725-732 , Natural Hazards and Earth Systems Sciences, Vol. 3, pp725-732
Modelling Windstorm LossModelling Windstorm Loss
10°0'0"W12°0'0"W
8°0'0"W
8°0'0"W
6°0'0"W
6°0'0"W
4°0'0"W
4°0'0"W
2°0'0"W
2°0'0"W 0°0'0"
0°0'0"
2°0'0"E
2°0'0"E
4°0'0"E
4°0'0"E
6°0'0"E
50°0'0"N50°0'0"N
52°0'0"N52°0'0"N
54°0'0"N54°0'0"N
56°0'0"N56°0'0"N
58°0'0"N58°0'0"N
60°0'0"N
60°0'0"N
Observed hourly wind Observed hourly wind information from UK information from UK Met OfficeMet Office
The 98th percentile The 98th percentile value of the daily value of the daily maximum mean and maximum mean and gust speeds used, gust speeds used, incorporating “wind incorporating “wind climate”climate”
98th percentile Maximum Gust Speeds
Dorland, K., J. Palutikof and R. Tol (2000). Modelling Storm Damage in the Netherlands and the UK., in Weather Impacts on Natural, Social and Economic Systems in the Netherlands. Institute for Environmental Studies, Vrije Universiteit, Amsterdam: 57-81.Hanson, C., T. Holt and J. Palutikof (2004). An Integrated Assessment of the potential for Change in Storm Activity over Europe: Implications for Insurance and Forestry in the UK. Norwich, Tyndall Centre: 98.
Wind Data
Modelling Windstorm LossModelling Windstorm Loss
Maximum windspeeds, not mean windspeeds, closely Maximum windspeeds, not mean windspeeds, closely related to damage (eg. Dorland et al (2000), Hanson related to damage (eg. Dorland et al (2000), Hanson et al (2004)).et al (2004)).Dorland, K., J. Palutikof and R. Tol (2000). Modelling Storm Damage in the Netherlands and the UK., in
Weather Impacts on Natural, Social and Economic Systems in the Netherlands. Institute for Environmental Studies, Vrije Universiteit, Amsterdam: 57-81.Hanson, C., T. Holt and J. Palutikof (2004). An Integrated Assessment of the potential for Change in Storm Activity over Europe: Implications for Insurance and Forestry in the UK. Norwich, Tyndall Centre: 98.
Wind DataR values for R values for Windspeed v Insured Loss
Relationship
R Value
Mean Windspeed
Max Windspeed
Exponential 0.36 0.46
Squared 0.51 0.65
Cubic 0.53 0.66
Based on sixty four 3-month periods
Modelling Windstorm LossModelling Windstorm LossSocio-economic Socio-economic DataData
Census data from Census data from 1981,1991 and 20011981,1991 and 2001
Experian data Experian data “Wealth indicators”“Wealth indicators”
10°0'0"W
8°0'0"W
8°0'0"W
6°0'0"W
6°0'0"W
4°0'0"W
4°0'0"W
2°0'0"W
2°0'0"W 0°0'0"
0°0'0"
2°0'0"E
2°0'0"E
4°0'0"E
4°0'0"E
6°0'0"E
50°0'0"N 50°0'0"N
52°0'0"N 52°0'0"N
54°0'0"N 54°0'0"N
56°0'0"N 56°0'0"N
58°0'0"N 58°0'0"N
60°0'0"N 60°0'0"N
Household Density (2000)
Modelling Windstorm LossModelling Windstorm LossClaims Claims DataData
Ecclesiastical Ecclesiastical Insurance GroupInsurance Group
Norwich Union (via Norwich Union (via loss adjustors loss adjustors Cunningham Lindsey)Cunningham Lindsey)
Claims data for Claims data for domestic properties domestic properties suffering losses suffering losses associated from associated from windstormwindstorm
Modelling Windstorm LossModelling Windstorm LossClaims Claims DataData
Ecclesiastical Ecclesiastical Insurance GroupInsurance Group
Norwich Union (via Norwich Union (via loss adjustors loss adjustors Cunningham Lindsey)Cunningham Lindsey)
Claims data for Claims data for domestic properties domestic properties suffering losses suffering losses associated from associated from windstormwindstorm
10°0'0"W
8°0'0"W
8°0'0"W
6°0'0"W
6°0'0"W
4°0'0"W
4°0'0"W
2°0'0"W
2°0'0"W 0°0'0"
0°0'0"
2°0'0"E
2°0'0"E
4°0'0"E
4°0'0"E
6°0'0"E
50°0'0"N 50°0'0"N
52°0'0"N 52°0'0"N
54°0'0"N 54°0'0"N
56°0'0"N 56°0'0"N
58°0'0"N 58°0'0"N
60°0'0"N 60°0'0"N
Claims Associated with Windstorm Erwin (Jan
2005)
Modelling Windstorm LossModelling Windstorm Loss
10°0'0"W
8°0'0"W
8°0'0"W
6°0'0"W
6°0'0"W
4°0'0"W
4°0'0"W 2°0'0"W
2°0'0"W
0°0'0"
0°0'0"
2°0'0"E
2°0'0"E
4°0'0"E
50°0'0"N50°0'0"N
52°0'0"N52°0'0"N
54°0'0"N54°0'0"N
56°0'0"N
56°0'0"N
58°0'0"N
58°0'0"N
60°0'0"N
60°0'0"N
Windstorm ErwinMax Gust Speeds (normalised to 98th
percentile value)10°0'0"W
8°0'0"W
8°0'0"W
6°0'0"W
6°0'0"W
4°0'0"W
4°0'0"W
2°0'0"W
2°0'0"W 0°0'0"
0°0'0"
2°0'0"E
2°0'0"E
4°0'0"E
4°0'0"E
6°0'0"E
50°0'0"N 50°0'0"N
52°0'0"N 52°0'0"N
54°0'0"N 54°0'0"N
56°0'0"N 56°0'0"N
58°0'0"N 58°0'0"N
60°0'0"N 60°0'0"N
Modelling Windstorm LossModelling Windstorm LossWindstorm Erwin
Predicted insured loss10°0'0"W
8°0'0"W
8°0'0"W
6°0'0"W
6°0'0"W
4°0'0"W
4°0'0"W 2°0'0"W
2°0'0"W
0°0'0"
0°0'0"
2°0'0"E
2°0'0"E
4°0'0"E
50°0'0"N50°0'0"N
52°0'0"N52°0'0"N
54°0'0"N54°0'0"N
56°0'0"N
56°0'0"N
58°0'0"N
58°0'0"N
60°0'0"N
60°0'0"N
Modelling Windstorm LossModelling Windstorm LossWindstorm Erwin
Predicted insured loss10°0'0"W
8°0'0"W
8°0'0"W
6°0'0"W
6°0'0"W
4°0'0"W
4°0'0"W 2°0'0"W
2°0'0"W
0°0'0"
0°0'0"
2°0'0"E
2°0'0"E
4°0'0"E
50°0'0"N50°0'0"N
52°0'0"N52°0'0"N
54°0'0"N54°0'0"N
56°0'0"N
56°0'0"N
58°0'0"N
58°0'0"N
60°0'0"N
60°0'0"N
10°0'0"W
8°0'0"W
8°0'0"W
6°0'0"W
6°0'0"W
4°0'0"W
4°0'0"W
2°0'0"W
2°0'0"W 0°0'0"
0°0'0"
2°0'0"E
2°0'0"E
4°0'0"E
4°0'0"E
6°0'0"E
50°0'0"N 50°0'0"N
52°0'0"N 52°0'0"N
54°0'0"N 54°0'0"N
56°0'0"N 56°0'0"N
58°0'0"N 58°0'0"N
60°0'0"N 60°0'0"N
Actual insured loss
OutlineOutline
1.1. Weather and economic lossWeather and economic loss
2.2. An example of a destructive European An example of a destructive European windstorm – Windstorm Erwin (Jan 2005)windstorm – Windstorm Erwin (Jan 2005)
3.3. Assessing and Modelling RiskAssessing and Modelling Risk
4.4. A windstorm model for the UKA windstorm model for the UK
5.5. Climate Change and Future Climate Change and Future losseslosses
Climate Change and Future Climate Change and Future LossesLosses
Crichton, D. (1999). The Risk Triangle, Natural Disaster Management. Journal, Ingleton. London, Tudor Rose: 102-103.Dlugolecki, A. (2004). A Changing Climate for Insurance - A summary report for Chief Executives and Policymakers, Association of British Insurers.
Risk Risk TriangleTriangle
Source: Crichton (1999)
Climate change Climate change
Change in Change in HazardHazard
Climate Change and Future Climate Change and Future LossesLosses
Crichton, D. (1999). The Risk Triangle, Natural Disaster Management. Journal, Ingleton. London, Tudor Rose: 102-103.Dlugolecki, A. (2004). A Changing Climate for Insurance - A summary report for Chief Executives and Policymakers, Association of British Insurers.
Risk Risk TriangleTriangle
Source: Crichton (1999)
Climate change Climate change
Change in Change in HazardHazard
ABI believe we are currently seeing an annual increase in losses of 2-4% due to climate change (Dlugolecki 2004)
Specific Risks of Climate Change: Shortening times between
events Shifting spatial distribution Changing variability of loss More hybrid events with
multiple consequences (eg. ENSO)
Abrupt or nonlinear changes in loss
Climate Change and Future Climate Change and Future LossesLosses
Threshold Exceedance (eg. Dam failure)
Hazard
Lo
ss
Threshold Point
Climate Change and Future Climate Change and Future LossesLosses
Threshold Exceedance (eg. New Orleans dykes breaking during Katrina)
Damage functions NOT a linear relationship to weather hazard
(eg. Wind Damage is related to cube of wind speed)
Hazard
Lo
ss
Threshold Point
Non
-Lin
ear
Incr
ease
Climate Change and Future Climate Change and Future LossesLosses
Knippertz et al (2000)Knippertz et al (2000) Increase of mean and extreme windspeeds in Northern Europe Increase of mean and extreme windspeeds in Northern Europe
and Eastern North Atlantic and Eastern North Atlantic
Climate Change and Future Climate Change and Future LossesLosses
Knippertz et al (2000)Knippertz et al (2000) Increase of mean and extreme windspeeds in Northern Europe Increase of mean and extreme windspeeds in Northern Europe
and Eastern North Atlantic and Eastern North Atlantic
Leckebusch and Ulbrich (2004)Leckebusch and Ulbrich (2004) Reduction in track density of extratropical cyclones over Reduction in track density of extratropical cyclones over
Europe by 6.9%Europe by 6.9% Increase in track density of intense (95Increase in track density of intense (95thth percentile) percentile)
extratropical cyclone below 60N (up to 20% increase)extratropical cyclone below 60N (up to 20% increase)
Climate Change and Future Climate Change and Future LossesLosses
Knippertz et al (2000)Knippertz et al (2000) Increase of mean and extreme windspeeds in Northern Europe Increase of mean and extreme windspeeds in Northern Europe
and Eastern North Atlantic and Eastern North Atlantic
Leckebusch and Ulbrich (2004)Leckebusch and Ulbrich (2004) Reduction in track density of extratropical cyclones over Reduction in track density of extratropical cyclones over
Europe by 6.9%Europe by 6.9% Increase in track density of intense (95Increase in track density of intense (95thth percentile) percentile)
extratropical cyclone below 60N (up to 20% increase)extratropical cyclone below 60N (up to 20% increase)
Leckebusch et al (2006)Leckebusch et al (2006) 4 GCMs, 5 RCMs 4 GCMs, 5 RCMs Increasingly frequent intense storms Increasingly frequent intense storms
Climate Change and Future Climate Change and Future LossesLosses
Using RCM output in the loss model to simulate future Using RCM output in the loss model to simulate future losseslosses
Climate Change and Future Climate Change and Future LossesLosses
Using RCM output in the loss model to simulate future Using RCM output in the loss model to simulate future losseslosses
PProviding roviding REREgional gional CClimates for limates for IImpacts mpacts SStudies tudies ((PRECISPRECIS)) driven by ECMWF 40 Year Re-analysis (ERA-40) driven by ECMWF 40 Year Re-analysis (ERA-40)
data data hourly data for 25km gridhourly data for 25km grid
Climate Change and Future Climate Change and Future LossesLosses
Using RCM output in the loss model to simulate future Using RCM output in the loss model to simulate future losseslosses
PProviding roviding REREgional gional CClimates for limates for IImpacts mpacts SStudies tudies ((PRECISPRECIS)) driven by ECMWF 40 Year Re-analysis (ERA-40) driven by ECMWF 40 Year Re-analysis (ERA-40)
data data hourly data for 25km gridhourly data for 25km grid
Run PRECIS with boundary conditions from Run PRECIS with boundary conditions from HadAM3P (2070-2100)HadAM3P (2070-2100) ECHAM4 (1960-2100)ECHAM4 (1960-2100)
Run PRECIS under different IPCC Special Report on Run PRECIS under different IPCC Special Report on Emissions Scenarios (SRES) Emissions Scenarios (SRES)
Thank YouThank You
Richard Hewstonr.hewston@uea.ac.uk
University of East Angliahttp://www.uea.ac.uk/~e470848/