Event Response Activities for the Near-Real Time Assessment of Financial Losses in Landfalling Hurricanes

This paper describes the typical activities on-going at a risk modeling company in the wake of a landfalling hurricane (Event Response), and what has been learned from the 2004 & 2005 seasons from an insurance business perspective.

Risk Management Solutions (RMS) is a Catastrophe (CAT) modeling firm that provides real-time hurricane catastrophe response during the Atlantic Basin Hurricane Season. The combined efforts of meteorologists, engineers and mathematicians within the company aid in the development of windfield footprints soon after hurricanes make landfall in the U.S. Insured losses are then estimated using knowledge of the industry vulnerability and the current market conditions.

Windfield footprints are initially constructed using information such as that provided by the H*Wind data-sets, made publicly available via Hurricane Research Division (HRD), supplemented by the Best-Track data available via National Hurricane Center (NHC). Together, these datasets comprise the primary contributors to the development of the offshore footprint via the RMS windfield model. The RMS modeled windfield footprint is further calibrated as information becomes available, using surface wind observations from the Florida Coastal Monitoring Program (FCMP), sea-based observations from the National Data Buoy Center (NDBC) and METAR data from the National Oceanic and Atmospheric Administration (NOAA), through an iterative process. The footprints provide RMS with the capability of convolving the hurricane perils linked to extreme winds with buildings behaviors for assessing property losses due to winds and ancillary perils.

Some examples of the Event Response process will be provided in this paper with a view into the evolving nature of hurricane windfield reconstruction using numerical weather prediction as a tool to derive the higher frequency changes in windfield structure (eye-wall replacement cycles). Another component of our Event Response is to assess the areas at risk for fresh water flooding. An example output for Hurricane Katrina will be presented.