Tornadoes and Severe
Convective Events:
Insurance Trends and Challenges in
an Era of Climate Volatility
National Tornado Summit
Oklahoma City, OK
February 11, 2014
Robert P. Hartwig, Ph.D., CPCU, President & Economist
Insurance Information Institute  110 William Street  New York, NY 10038
Tel: 212.346.5520  Cell: 917.453.1885  bobh@iii.org  www.iii.org
U.S. Insured Catastrophe
Loss Update
Tornadoes Are Among the Top Causes
of Catastrophic Claims
The Toll of Tornadoes in Increasing
2
U.S. Insured Catastrophe Losses
($ Billions, $ 2012)
$73.4
2011 was the costliest
year ever for tornado
and t-storm events at
$26 billion
$80
$70
$12.9
$35.0
$33.6
$14.4
$11.5
$7.5
$10.5
$29.2
$33.7
$16.3
$7.6
$6.1
$11.6
$14.3
$3.8
$11.0
$12.6
$8.8
$10
$8.0
$20
$4.8
$30
$14.0
$40
$26.4
$37.8
$50
$34.7
$60
$0
89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13*
Tornadoes are among the largest causes of insured
losses (claims) in any given year, accounting for
36% of all insured losses since 1983.
Overall CAT
losses eased in
2013. The Moore,
OK, event was the
costliest of 2013.
*Through 12/31/13.
Note: 2001 figure includes $20.3B for 9/11 losses reported through 12/31/01 ($25.9B 2011 dollars). Includes only business and personal property
claims, business interruption and auto claims. Non-prop/BI losses = $12.2B ($15.6B in 2011 dollars.)
Sources: Property Claims Service/ISO; Insurance Information Institute.
3
Natural Disaster Losses in the
United States, by Type, 2013
As of December 31,
2013
Number of
Events
Fatalities
Estimated Overall
Losses (US $m)
Estimated Insured
Losses (US $m)
Severe
Thunderstorm
69
110
16,341
10,274
Winter Storm
11
43
2,935
1,895
Flood
19
23
1,929
240
Earthquake &
Geophysical
6
1
Minor
Minor
Tropical Cyclone
1
1
Minor
Minor
Wildfire, Heat, &
Drought
22
29
620
385
Totals
128
207
21,825
12,794
Source: Munich Re NatCatSERVICE
4
Significant Natural Catastrophes, 2013
(Events with $1 billion economic loss and/or 50 fatalities)
Date
Event
Estimated Economic
Losses (US $m)
February 24 – 25
Winter Storm
1,300
690
March 18 – 19
Thunderstorms
2,200
1,600
April 7 – 11
Winter Storm
1,600
1,200
April 16 – 18
Thunderstorms
1,100
560
May 18 – 20
Thunderstorms
3,100
1,800
May 28 – 31
Thunderstorms
2,800
1,400
August 6 – 7
Thunderstorms
1,300
740
September 9 – 16
Flooding
1,500
160
November 17 - 18
Thunderstorms
1,300
931
Source: Munich Re NatCatSERVICE
Estimated Insured
Losses (US $m)
5
Top 8 States for Insured
Catastrophe Losses, 2013
$ Millions
2,000
$1,995
Oklahoma led the
country in insured
CAT losses in 2013
1,800
1,600
$1,509
1,400
1,200
1,000
$907
$845
800
$773
$762
$661
600
$593
400
200
0
Oklahoma
Texas
Colorado
Minnesota
Source: The Property Claim Services (PCS) unit of ISO, a Verisk Analytics company.
Nebraska
Georgia
Illinois
Louisiana
6
Top 5 States by Insured Catastrophe
Losses in 2011*
2011 experienced record
claims from tornadoes.
Insured losses from
thunderstorms (including
tornadoes) totaled $26 Bill.
(2012, $ Millions)
$4,000
$3,643
$3,500
$3,187
$3,077
$3,041
$3,000
$2,500
$2,199
$2,000
$1,500
$1,000
Texas
Alabama
*Includes catastrophe losses of at least $25 million.
Sources: PCS unit of ISO; Insurance Information Institute.
Missouri
Tennessee
N. Carolina
8
Inflation Adjusted U.S. Catastrophe
Losses by Cause of Loss, 1993–20121
Wind/Hail/Flood (3), $14.9
Fires (4), $6.5
Other (5), $0.2
1.7%
Geological Events, $18.4
4.7% 3.8%0.1%
Terrorism, $24.8
6.3%
Winter Storms, $27.8
7.1%
Tornado share of
CAT losses is
rising
Tornadoes (2), $140.9
Insured cat losses
from 1993-2012
totaled $391.7B, an
average of $19.6B
per year or $1.6B
per month
40.4%
Hurricanes & Tropical Storms,
$158.2
36.0%
Tornadoes
accounted for 36% of
insured CAT losses
from 1993-2012—a
total of $140.9B
1. Catastrophes are defined as events causing direct insured losses to property of $25 million or more in 2012 dollars.
2. Excludes snow.
3. Does not include NFIP flood losses
4. Includes wildland fires
5. Includes civil disorders, water damage, utility disruptions and non-property losses such as those covered by workers compensation.
Source: ISO’s Property Claim Services Unit.
9
Top States by Inflation-Adjusted
Insured Catastrophe Losses, 1983–2012
Over the Past 30 Years Florida Has Accounted for the Largest Share of
Catastrophe Losses in the U.S., Followed by Texas and Louisiana
TX is the second
costliest state
for CATs, with
nearly $49B in
insured losses
over the past 30
years—
tornadoes are a
significant share
of the total
Louisiana
$42.0B
Texas
$48.8B
9.0%
10.4%
Rest of the U.S.
$309.9B
14.3%
Florida
$66.7B
Source: PCS unit of ISO, Verisk Company.; Insurance Information Institute.
66.3%
Total: $467.5 Billion,
an average of
$16.6B per year or
$1.3B per month
10
Top 16 Most Costly Disasters
in U.S. History
(Insured Losses, 2012 Dollars, $ Billions)
Hurricane Sandy
became the 5th
costliest event in US
insurance history
$60
$50
$48.7
$40
$30
Includes
Tuscaloosa, AL,
tornado
Includes
Joplin, MO,
tornado
$23.9 $24.6 $25.6
$18.8
$20
$10
$0
$9.2 $11.1
$8.7
$7.8
$7.5
$7.1
$6.7
$4.4 $5.6 $5.6
Irene (2011) Jeanne
(2004)
Frances
(2004)
Rita
Tornadoes/Tornadoes/ Hugo
(2005) T-Storms T-Storms
(1989)
(2011)
(2011)
Hurricane Irene became the
12th most expense hurricane
in US history in 2011
Ivan
(2004)
Charley
(2004)
Wilma
(2005)
$13.4
Ike
(2008)
Sandy
(2012)
Northridge9/11 Attack Andrew
(1994)
(2001)
(1992)
Katrina
(2005)
12 of the 16 Most Expensive
Events in US History Have
Occurred Since 2004
Sources: PCS; Insurance Information Institute inflation adjustments to 2012 dollars using the CPI.
11
Natural Disasters in the United States,
1980 – 2013
Number of Events (Annual Totals 1980 – 2013)
250
There were 128 natural
disaster events in 2013
Number
200
150
100
22
50
19
81
6
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Geophysical
(earthquake, tsunami,
volcanic activity)
Source: MR NatCatSERVICE
Meteorological (storm)
Hydrological
(flood, mass movement)
Climatological
(temperature extremes,
drought, wildfire)
12
Losses Due to Natural Disasters in the US,
1980–2013
(2013 Dollars, $ Billions)
200
150
(Overall and Insured Losses)
2013 losses were far
below 2011 and 2012
and were 44% lower
than the average from
2000-2012
Indicates a great
deal of losses are
uninsured (~40%50% in the US) =
Growth
Opportunity
2013 CAT Losses
Overall : $21.8B
Insured: $12.8B
100
50
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Overall losses (in 2012 values)
Source: MR NatCatSERVICE
Insured losses (in 2013 values)
13
The Terrible and Costly
Toll of Tornadoes
Tornadoes Cause Billions in Insured
Losses Each Year
Costs Are Increasing
14
Number of Tornadoes and Related
Deaths, 1990 – 2013*
800
600
1,692
400
898
939
1,691
1,282
1,098
1,103
1,376
1,216
1,071
1,148
1,173
1,234
1,082
1,173
1,297
1,132
553
500
941
1,000
1,133
1,200
600
898 tornadoes were recorded
in 2013 and 55 deaths*
400
300
200
Number of Deaths
Number of Tornadoes
1,600
1,345
1,424
Number of Deaths
1,800
1,400
1,819
1,146
Number of Tornadoes
1,264
2,000
Tornadoes claimed 553 lives in
2011, the most since 1925
100
200
0
0
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
2013 tornado activity was below average despite major storms in
Oklahoma. Since 1990, 1,859 people have been killed in tornado events.
*Through Dec. 31, 2013.
Source: U.S. Department of Commerce, Storm Prediction Center, National Weather Service at http://www.spc.noaa.gov/climo/online/monthly/newm.html
15
U.S. Thunderstorm Insured Loss Trends,
1980 – 2013
Hurricanes get all the headlines,
but thunderstorms are consistent
producers of large scale loss.
2008-2013 are the most expensive
years on record.
Average
thunderstorm
losses are up 7 fold
since the early
1980s. The 5-year
running average
loss is up sharply
Source: Property Claims Service, and MR NatCatSERVICE
Thunderstorm losses in 2013
totaled $10.3 billion, the 6th
highest on record
16
Insured Losses from Tornado/Thunderstorm/
Hail Catastrophes, 2000-2013, (Top 25 States)
Insured Losses (in Millions of 2013 Dollars)
Texas leads the US
by a wide margin in
insured losses
from convective
events
$2,696
$2,624
$2,452
$2,296
$2,294
$2,003
$1,942
$1,806
$1,806
$1,539
$1,407
IA
NC
NE
AR
PA
MS
NY
MI
VA
MD
SC
$5,504
CO
$3,017
$5,649
AL
AZ
$5,783
IN
$4,000
$3,394
$5,786
OH
$4,633
$5,834
$6,000
KS
$6,729
$8,000
$7,587
$8,685
$10,000
$9,392
$9,772
$12,000
KY
Oklahoma has the second
highest insured losses in the US
from tornado/thunderstorm and
hail events
$14,000
$4,688
$16,000
GA
$16,870
$18,000
Insurers paid $134.6 billion to
policyholders in claims associated
with severe convective events from
2000-2013 (in 2013 dollars)—or $9.6
billion per year, on average
WI
MN
IL
TN
MO
OK
$0
TX
$2,000
Sources: Property Claims Service, a Division of Verisk Analytics; Insurance Information Institute.
18
Insured Losses from Tornado/Thunderstorm/
Hail Catastrophes, 2000-2013 (Bottom 25 States)
Insured Losses (in Millions of 2013 Dollars)
$1,324
$846
$44
$64
$88
$96
$96
$104
$315
$347
$430
$448
$463
$469
$478
$163
$200
States in the West and
North have the fewest
convective losses
$376
$400
$515
$600
$541
$800
$113
$1,000
$924
$1,200
$155
$1,400
Insurers paid $134.6 billion to
policyholders in claims associated
with severe convective events from
2000-2013 (in 2013 dollars)—or $9.6
billion per year, on average
$0
NJ LA CA FL SD ND MA WY NM CT WV WA MT OR RI NH NV ME UT DE VT DC
Sources: Property Claims Service, a Division of Verisk Analytics; Insurance Information Institute.
19
Oklahoma: Insured Losses from Tornado/
Thunderstorm/Hail Catastrophes, 2000-2013
Insured Losses (in Millions of 2013 Dollars)
Oklahoma sustained $9.8 billion in
insured losses from convective events
from 2000-2013, second only to $16.9
billion in Texas over the same period
$2,500
$2,000
$2,338
$1,988
$1,407
$1,500
$1,269
$1,000
$859
$554
$500
$296
$197
$41
$650
$6
$78
$82
05
06
$9
$0
00
01
02
03
04
07
08
Sources: Property Claims Service, a Division of Verisk Analytics; Insurance Information Institute.
09
10
11
12
13
20
Texas: Insured Losses from Tornado/
Thunderstorm/Hail Catastrophes, 2000-2013
Insured Losses (in Millions of 2013 Dollars)
$3,000
$2,500
Texas sustained $16.9 billion in insured
losses from convective events from
2000-2013, far ahead of #2 Oklahoma at
$9.8 billion over the same period
$2,669
$2,603
$2,352
$2,000
$1,617
$1,465
$1,500
$1,365
$996
$1,000
$816
$794
$618
$586
$500
$298
$419
$272
$0
00
01
02
03
04
05
06
07
08
Sources: Property Claims Service, a Division of Verisk Analytics; Insurance Information Institute.
09
10
11
12
13
21
Missouri: Insured Losses from Tornado/
Thunderstorm/Hail Catastrophes, 2000-2013
Insured Losses (in Millions of 2013 Dollars)
Missouri sustained $9.4 billion in
insured losses from convective events
from 2000-2013, ranking third in the
country behind only Texas ($16.9B) and
Oklahoma ($9.8B)
$3,500
$3,000
$2,500
$3,187
$1,888
$2,000
$1,331
$1,500
$910
$1,000
$500
$142
$53
$396 $308
$42
$28
$281 $352 $202
$272
$0
00
01
02
03
04
05
06
07
08
Sources: Property Claims Service, a Division of Verisk Analytics; Insurance Information Institute.
09
10
11
12
13
22
States with Highest Insured Losses from Tornado/
Thunderstorm/Hail Catastrophes, 2000-2013
Insured Losses (in Millions of 2013 Dollars)
8 different states have led the country in
insured losses from severe convective
events from 2000-2013. The average
peak state loss is $1.78 billion.
$3,500
$3,000
$3,239
$2,669
$2,352
$2,338
$2,500
$1,988
$1,888
$2,000
$1,617
$1,713
$1,698
$1,505
$1,500
$1,140
$882
$1,000
$996
$839
$500
$0
00
01
02
03
04
05
06
07
08
09
10
Sources: Insurance Information Institute based on data from Property Claims Service, a Division of Verisk Analytics.
11
12
13
23
Top 10 Costliest Events Involving
Tornadoes Count ($ millions)*
The 2011 events in Joplin
and Tuscaloosa remain the
costliest in US history
(Moore would rank about
15th on an inflation
adjusted basis)
All 10 of the
costliest
tornado
events in US
history
occurred
since 2001
*Also includes damage from other causes of losses occurring during the same event such as hail, wind and flood.
Source: PCS, a division of Verisk Analytics; Insurance Information Institute.
24
Insurance Industry Financial
Impacts of Tornadoes and
Convective Events
Convective Events Are a Major Driver of
Higher Property Insurance Premiums
25
Homeowners Insurance Catastrophe-Related
Claim Frequency and Severity, 1997—2012*
Avg. catastrophe
claim cost rose
approximately 200%
from 1997-2011
Cat claim frequency in
2011 was at historic
highs and more than
double the rate in 1997
*All policy forms combined, countrywide.
Source: Insurance Research Council, Trends in Homeowners Insurance Claims, Sept. 2012 from ISO Fast Track data.
26
Combined Ratio Points Associated with
Catastrophe Losses: 1960 – 2013*
8.7
8.9
8.1
3.4
3.4
2012
2010
2008
2006
1.6
2.6
2.7
3.3
3.3
1.6
2002
2004
1.6
2000
1.0
1998
1996
5.0
5.4
3.6
2.9
3.3
2.8
2.3
2.1
1990
1992
1.2
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1.2
0.4
0.8
1.3
0.3
0.4
0.7
1.5
1.0
0.4
0.4
0.7
1.8
1.1
0.6
1.4
2.0
1.3
2.0
0.5
0.5
0.7
1968
1966
3.0
3.6
0.4
1964
1962
0.8
1.1
1.1
0.1
0.9
1960
1
0
5.9
1960s: 1.04
1970s: 0.85
1980s: 1.31
1990s: 3.39
2000s: 3.52
2010s: 6.1E*
8
7
3
2
8.8
10
9
6
5
4
Catastrophe losses as a
share of all losses reached
a record high in 2012
Avg. CAT Loss
Component of the
Combined Ratio
by Decade
1994
Combined Ratio Points
The Catastrophe Loss Component of Private Insurer Losses Has
Increased Sharply in Recent Decades
*2010s represent 2010-2013.
Notes: Private carrier losses only. Excludes loss adjustment expenses and reinsurance reinstatement premiums. Figures are adjusted for
losses ultimately paid by foreign insurers and reinsurers.
Source: ISO (1960-2011); A.M. Best (2012E) Insurance Information Institute.
27
ROE: Property/Casualty Insurance vs.
Fortune 500, 1987–2013E*
(Percent)
P/C Profitability Is Both by
Cyclicality and Ordinary Volatility
20%
Katrina,
Rita, Wilma
15%
Sandy
10%
Sept. 11
5%
0%
Hugo
Lowest CAT
Losses in
15 Years
Andrew
Northridge
4 Hurricanes
Financial
Crisis*
Record
Tornado
Losses
-5%
87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13E
* Excludes Mortgage & Financial Guarantee in 2008 – 2013E. 2013 P/C ROE is through 2013:Q3.
Sources: ISO, Fortune; Insurance Information Institute.
28
Homeowners Insurance Combined
Ratio: 1990–2013E
158.4
Hurricane
Andrew
170
160
Record
tornado
activity
Hurricane
Sandy
150
94.0
104.1
122.3
106.9
105.8
116.6
95.6
100.3
89.0
90
94.4
100
98.2
1
Hurricane
Ike
109.3
121.7
111.4
108.2
109.4
121.7
118.4
112.7
101.0
110
113.6
120
117.7
130
113.0
140
80
90 91 92 93 94 95 96 97 98 99 00 01
02 03 04 05 06 07 08 09 10 11 12 13E
Homeowners performance in 2011 was severely impacted by
record tornado activity. Home insurers paid out $1.22 in claims
and expenses for every dollar they earned in premium.
Sources: A.M. Best; Insurance Information Institute.
29
Top Ten Most Expensive And Least Expensive
States For Homeowners Insurance, 2011 (1)
Texas ranked as the 3rd most expensive state for homeowners insurance
in 2011, with an average expenditure of $1,578.
Rank
Most
expensive states
HO average
premium
Rank
Least
expensive states
HO average
premium
1
Florida
$1,933
1
Idaho
$518
2
Louisiana
1,672
2
Oregon
559
3
Texas (2)
1,578
3
Utah
563
4
Mississippi
1,409
4
Wisconsin
592
5
Oklahoma
1,386
5
Washington
626
6
Alabama
1,163
6
Ohio
644
7
Rhode Island
1,139
7
Delaware
664
8
Kansas
1,103
8
Arizona
675
9
New York
1,097
9
Nevada
689
10
Connecticut
1,096
10
Iowa
713
(1) Includes policies written by Citizens Property Insurance Corp. (Florida) and Citizens Property Insurance Corp. (Louisiana), Alabama Insurance
Underwriting Association, Mississippi Windstorm Underwriting Association, North Carolina Joint Underwriting Association and South Carolina
Wind and Hail Underwriting Association. Other southeastern states have wind pools in operation and their data may not be included in this chart.
Based on the HO-3 homeowner package policy for owner-occupied dwellings, 1 to 4 family units. Provides “all risks” coverage (except those
specifically excluded in the policy) on buildings and broad named-peril coverage on personal property, and is the most common package written.
(2) The Texas Department of Insurance developed home insurance policy forms that are similar but not identical to the standard forms. In addition,
due to the Texas Windstorm Association (which writes wind-only policies) classifying HO-1, 2 and 5 premiums as HO-3, the average premium for
homeowners insurance is artificially high.
Note: Average premium=Premiums/exposure per house years. A house year is equal to 365 days of insured coverage for a single dwelling. The NAIC
does not rank state average expenditures and does not endorse any conclusions drawn from this data.
Source: ©2013 National Association of Insurance Commissioners (NAIC). Reprinted with permission. Further reprint or distribution strictly prohibited
without written permission of NAIC.
30
Federal Disaster
Declarations Patterns:
1953-2014
Disaster Declarations Set New
Records in Recent Years
Hundreds of Declarations
Involved Tornadoes
31
Number of Federal Major Disaster
Declarations, 1953-2014*
99
81
75
55
47
59
63
48
52
56
44
7
32
36
32
38
43
45
11
31
34
24
21
15
23
22
25
27
28
23
38
30
29
17
17
19
11
11
22
20
25
25
12
12
7 federal disasters were
declared so far in 2014*
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
7
7
13
17
18
16
16
40
0
42
48
46
46
60
20
69
65
80
The number of federal disaster
declarations set a new record in
2011, with 99, shattering 2010’s
record 81 declarations.
50
45
45
49
100
There have been 2,150
federal disaster
declarations since
1953. The average
number of declarations
per year is 35 from
1953-2013, though
there few haven’t been
recorded since 1995.
75
120
The Number of Federal Disaster Declarations Is Rising and Set New Records
in 2010 and 2011 Before Dropping in 2012/13
*Through February 9, 2014.
Source: Federal Emergency Management Administration; http://www.fema.gov/disasters; Insurance Information Institute.
32
Federal Disasters Declarations by State,
1953 – 2014: Highest 25 States*
Over the past 60
years, Texas has
had the highest
number of Federal
Disaster
Declarations
75
43
46
47
47
44
40
40
48
49
50
51
51
52
52
50
50
53
55
55
56
57
60
60
66
70
67
Disaster Declarations
80
79
90
88
100
30
20
10
0
TX CA OK NY FL LA AL KY MO AR
IL MS IA TN WV MN KS PA NE VA OH WA ND SD ME
*Through Feb. 9, 2014. Includes Puerto Rico and the District of Columbia.
Source: FEMA: http://www.fema.gov/news/disaster_totals_annual.fema; Insurance Information Institute.
33
Federal Disasters Declarations by State,
1953 – 2014: Lowest 25 States*
Over the past 60 years,
Wyoming and Rhode
Island had the fewest
number of Federal
Disaster Declarations
11
11
13
15
15
9
10
17
22
23
23
24
24
26
26
26
26
28
33
35
36
38
39
19
20
29
30
37
Disaster Declarations
40
40
42
50
0
NC AK IN VT WI GA NJ NH MA OR PR HI MI NM AZ MD ID MT CO CT NV DE SC DC UT RI WY
*Through Feb. 9, 2014. Includes Puerto Rico and the District of Columbia.
Source: FEMA: http://www.fema.gov/news/disaster_totals_annual.fema; Insurance Information Institute.
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SEVERE WEATHER REPORT UPDATE: 2013
Damage from Tornadoes, Large Hail
and High Winds Keep Insurers Busy
35
Location of Tornado Reports in 2013
A deadly EF-5
tornado in May in
Moore, OK,
produced insured
losses of $1.575
billion. November
tornadoes in the
Midwest produced
$1B in insured
losses.
There were 943
tornadoes
through Dec. 31,
causing
extensive
property
damage in
several states
Source: NOAA Storm Prediction Center; http://www.spc.noaa.gov/climo/online/monthly/2013_annual_summary.html#; PCS.
36
U.S. Tornado Count, 2005-2013*
There were 1,897 tornadoes
in the U.S. in 2011 far
above average, but well
below 2008’s record
2013 count
was the
lowest in a
decade
*Through Dec. 31, 2013.
Source: http://www.spc.noaa.gov/wcm/.
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Location of Large Hail Reports: 2013
There were
5,457 “Large
Hail” reports in
2013, causing
extensive
property and
vehicle damage
Source: NOAA Storm Prediction Center; http://www.spc.noaa.gov/climo/online/monthly/2013_annual_summary.html#
38
Location of High Wind Reports: 2013
There were
12,942 “Wind
Damage” in
2013, causing
extensive
property
damage
Source: NOAA Storm Prediction Center; http://www.spc.noaa.gov/climo/online/monthly/2013_annual_summary.html#
39
Severe Weather Reports: 2013
Severe weather reports
are concentrated east
of the Rockies
There were
19,342 severe
weather reports
in 2013;
including 942
tornadoes;
5,457 “Large
Hail” reports
and 12,942 high
wind events
Source: NOAA Storm Prediction Center; http://www.spc.noaa.gov/climo/online/monthly/2013_annual_summary.html#
40
SEVERE WEATHER REPORTS:
LONGER-RUN CONVECTIVE EVENT TRENDS
Damage from Tornadoes, Large Hail
and High Winds Keep Insurers Busy
41
Severe Weather Days per Year,
2003-2012
Source: http://www.spc.noaa.gov/wcm/.
Areas in the heart of
Tornado Alley typically
have 20-25 “Severe
Weather Days” per year
42
Severe Thunderstorm Wind Days per Year,
2003-2012
Source: http://www.spc.noaa.gov/wcm/.
Severe t-storm events
can breed tornadoes.
KS and FL have the
highest density of
severe t-storms.
43
Tornado Watches and Departure from
Average: 2013 vs. 2011
2013: LOW ACTIVITY
2011: HIGH ACTIVITY
Far above
normal
number of
watches
Departure
from
average
was
enormous
Source: http://www.spc.noaa.gov/wcm/.
44
Severe Thunderstorm Wind Days per Year,
2003-2012
Source: http://www.spc.noaa.gov/wcm/.
Wind due to severe t-storm
can occur in many areas but
is concentrated further east
45
Tornado Days per Year, 2003-2012
Source: http://www.spc.noaa.gov/wcm/.
Peak tornado zones
have 2-3 Tornado
Days per year
46
Severe Hail Days per Year, 2003-2012
Source: http://www.spc.noaa.gov/wcm/.
Severe hail occurs
commonly in severe tstorms and areas
experiencing tornadoes
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Severe Convective Events:
A Global Perspective
Severe Thunderstorm Events Are
Becoming More Common Globally
Trend Is Likely to Continue
50
Natural Loss Events:
Full Year 2013
World Map
Winter Storm Christian (St. Jude)
Europe, 27–30 October
Flash floods
Canada, 8–9 July
Floods
Meteorite impact
Europe,
30 May–19 June
Russian Federation, 15
February
Earthquake
Floods
China, 20 April
Canada, 19–24 June
Hailstorms
Germany,
27–28 July
Floods
Typhoon Fitow
China, Japan,
5–9 October
Severe storms,
tornadoes
USA, 9–16 September
USA, 18–22 May
Typhoon Haiyan
Philippines,
8–12 November
Severe storms, tornadoes
USA, 28–31 May
Floods
India, 14–30 June
Hurricanes Ingrid &
Manuel
Australia,
21–31 January
Mexico, 12–19 September
880
Loss events
Floods
Earthquake (series)
Pakistan, 24–28 September
Heat wave
India, April–June
Natural catastrophes
Selection of significant
Natural catastrophes
Geophysical events
(earthquake, tsunami, volcanic activity)
Meteorological events
(storm)
Source: Munich Re Geo Risks Research, NatCatSERVICE – as of January 2014.
Hydrological events
(flood, mass movement)
Climatological events
(extreme temperature, drought, wildfire)
Extraterrestrial events
(Meteorite impact)
51
Hailstorm on July 27-28 2013 in Germany
Was Most Expensive CAT Worldwide!
Hailstones with
diameters up to 8 cm
(tennis ball ≈ 7 cm)
Region
Overall
losses
Insured
losses
Fatalities
Southwestern and Northern
Germany
US$ 4.8bn
US$ 3.7bn
0
Source: Munich Re Geo Risks Research, NatCatSERVICE – as of January 2014.
52
Unusual Weather Pattern Over the US in
Spring 2013 Led to Low Convective Activity
Reasons for lack of tornado activity
during spring:
 Strong high pressure anchored
over the northeast Pacific Ocean
 Polar jet stream forced much
further north than normal into
Alaska before diving southward
across the eastern United States
 This pattern allowed cool Arctic
air masses to dive south over the
central United States, keeping
the atmosphere relatively stable.
Source: Munich Re Geo Risks Research, NatCatSERVICE .
54
New Research by Munich Re on Trends
of Convective Loss Events in the US
Published in Journal “Weather, Climate and Society“ of the American
Meteorological Society
© 2014 Munich Re
55
Water content of the atmosphere has already
increased
Decadal changes of Specific Humidity of the lower atmosphere between 1973 and 2012
Black dots:
regions with significant trend
Source: Willett et. al. (2013), Clim. Past, 9, 657–677
© 2014 Munich Re
56
New study suggests future increases in
convective storm risk
PNAS Early Edition,
September 2013
© 2014 Munich Re
57
What Do the 2013 Tornado and Tropical
Storm Anomalies Mean for the Next Years?
Convective Storms
 US Tornado season 2013 dominated by short term air pressures patterns
 No reason to expect another season like 2013 in 2014
 On the long term climate change most probably will increase activity of
convective storms, events like in Germany 2013 may become more
frequent.
Tropical Storms
 2013 hurricane activity dominated by unusual short term effects
- such short term effects cannot be predicted on a seasonal basis
- no reason to believe to see a repetition next year
- 2014 starts again with the odds of the current Atlantic warm phase.
 Typhoon activity will rise in the next years due to a natural oscillation
2013 a first indicator of this?
Source: Munich Re Geo Risks Research, NatCatSERVICE .
58
Insurance Information Institute Online:
www.iii.org
Thank you for your time
and your attention!
Twitter: twitter.com/bob_hartwig
Download at www.iii.org/presentations
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