risk on the rise: counting the cost of inland flooding

1 Copyright © 2016 Risk Management Solutions, Inc. All Rights Reserved. January 21, 2016

RISK ON THE RISE: COUNTING THE COST OF INLAND FLOODING Dr. Robert Muir-Wood Chief Research Officer

Dr. Navin Peiris Senior Director, Model Development


MEET THE EXPERTS

Dr. Robert Muir-Wood Chief Research Officer

Dr. Navin Peiris Senior Director,

Model Development


INLAND FLOOD RISK =

HAZARD EXPOSURE VULNERABILITY X X

FLOOD LOSSES ARE NOT ONLY DEPENDENT UPON HAZARD


Inundation Rainfall Runoff

Major and Minor Rivers

Defenses and

Drainage

RECAP: HAZARD GENERATION

Precipitation

PRECIPITATION


INLAND FLOOD RISK =

UNDERSTANDING EXPOSURE


THE IMPORTANCE OF UNDERLYING DIGITAL

TERRAIN DATA


COLLECTING FLOOD-RELEVANT EXPOSURE DATA

TROPICAL STORM ALLISON, 2001

THAI FLOODS, 2011


1.  Where detailed location information is unknown: Exposure Disaggregation

2.  Where primary characteristics of a location are unknown: Building Inventory

HOW TO HANDLE SITUATIONS WHERE DETAILED EXPOSURE DATA IS NOT AVAILABLE


INLAND FLOOD RISK =

TRANSLATING HAZARD AND EXPOSURE INTO LOSS


FLOOD DAMAGE TO BUILDINGS IS PRINCIPALLY

NONSTRUCTURAL

STRUCTURAL DAMAGE CAN OCCUR WHERE HIGH FLOW CONDITIONS EXIST

THERE IS OFTEN SUBSTANTIAL DAMAGE TO CONTENTS

15 Copyright © 2016 Risk Management Solutions, Inc. All Rights Reserved. January 21, 2016 Copyright © 2015 Risk Management Solutions, Inc..

THE LIKELIHOOD OF FLOODING OF A SPECIFIC PROPERTY IS DEPENDENT UPON A NUMBER

OF FACTORS

A number of factors in addition

to hazard determine if a

specific property is flooded


Characterization of flood

vulnerability

DamageRa

(o

FloodDepth

Probabilityofcompleteloss

Probabilityofnoloss

MeanDamageRa(o

Centraldistribu5on


Uncertainty in flood loss data

and challenges in vulnerability development

Wide distribution of claims data on a flood depth vs. loss ratio plot highlights the level of uncertainty in flood loss estimation and hence challenges faced during development of vulnerability functions

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 50 100 150 200 250 300 350

LossRa(

o

FloodDepth(cm)

Groundflooronly Cellarandgroundfloorflooded Cellaronly


CONSTRUCTING AN ADVANCED FLOOD VULNERABILITY CURVE

Single-Component, Engineering-

Based Approach

Country-Specific Damage Functions

Validated by Claims Data

Dam

age

Rat

io

Flood Depth


DIFFERENTIATION OF FLOOD VULNERABILITY

Property Elevation

Threshold Elevation

Basement and Basement

Occupancies

Number of Stories

Property Age

Construction Type

Private Flood

Defenses


IMPACT OF EXPOSURE CHARACTERISTICS UPON LOSSES


SPECIAL TREATMENT OF INDUSTRIAL FACILITIES

PETROCHEMICAL/OIL REFINERY SEMICONDUCTOR FABRICATION FACILITY

POST-EVENT LOSS AMPLIFICATION (PLA) CAN PROVIDE AN ADDITIONAL

SOURCE OF LOSS


CALIBRATION AND VALIDATION STEPS ENSURE THAT MODELED LOSSES ARE REALISTIC

2007 U.K. Floods

•  50% of 2007 U.K. flood losses were off-floodplain

•  Industry consensus of 30-50 year return period losses

U.K. Flood Model

•  50% of annual average loss from pluvial flooding

•  30-50 year return period aligned to modelled exceedance probability

2013 Central European

Floods

•  40% of losses in Germany were off-floodplain

•  Industry consensus of 40-50 year return period losses

Continental Europe Flood

Models

•  20-40% of annual average loss from pluvial flooding

•  40-50 year return period a good validation point for the model


DETERMINING LOSSES IN REAL TIME IN THE AFTERMATH OF FLOOD EVENTS

INLAND FLOOD RISK =


A STOCHASTIC EVENT THAT MATCHES THE OBSERVED EVENT CLOSELY

ENOUGH FOR AN ACCURATE LOSS ESTIMATE IS UNLIKELY TO EXIST


CHALLENGES IN DEVELOPING FLOOD FOOTPRINT RECONSTRUCTIONS

Location of Defense Failures

Uncertain

Measurements of River Discharge

Can Be Unreliable or Nonexistent

Inaccuracies in Using Satellite Data

Alone


HOW AN EFFECTIVE FLOOD FOOTPRINT IS DEVELOPED 1.  Identify which

areas have been flooded

2.  Understand the return period of flooding and use appropriate flood maps to determine inundation

3.  Validate using damage survey measurements RMS-surveyed flood depths (red outlined circles), modeled footprint (blue shading), and PERILS-based

accumulation footprint (green outline) for the 2013 central European floods in Meissen, Germany

28 Copyright © 2016 Risk Management Solutions, Inc. All Rights Reserved. January 21, 2016 28 28 Copyright © 2015 Risk Management Solutions, Inc. All Rights Reserved. January 21, 2016

LESSONS LEARNED FROM RECENT RECONNAISSANCE


THE 2013 CENTRAL EUROPEAN FLOODS – HIGHLIGHTED THE NEED FOR GRANULAR EXPOSURE DATA

EXTERNAL DAMAGE INTERNAL DAMAGE


THE 2013 CENTRAL EUROPEAN FLOODS – OIL CONTAMINATION LEADING TO WRITE-OFF §  Loss exacerbated by the presence of oil contamination leads to demolition and reconstruction


DECEMBER 2015, STORM DESMOND FLOODS, U.K. - RESIDENTIAL PROPERTY DAMAGE – DAMAGE TO BASEMENTS


DECEMBER 2015, STORM DESMOND FLOODS, U.K. - POWER OUTAGES

§  Flooded electricity substation in Lancaster led to power outages for 55,000 homes and business throughout north Lancashire up to 2 weeks


DECEMBER 2015, STORM EVA FLOODS, U.K. – CHALLENGES OF FLOOD FOOTPRINT DEVELOPMENT - YORK

River Foss

River Ouse

Flood gates


DECEMBER 2015, STORM EVA FLOODS, U.K. – ELEVATION, BASEMENTS, FLOOD DEFENCES DRIVING COMMERCIAL LOSSES

Damage to commercial properties and contents on Walmgate, York

BT building on Garden Place with sandbags and basement being pumped,, Leeds


MONSOON FLOODING IN CHENNAI, INDIA, NOVEMBER 2015

§  Business Interruption loss driven damage to facilities as well as unavailability of man-power due to access difficulties and government announcing 2-day holiday for safety reasons


Dr. Robert Muir-Wood Chief Research Officer

Dr. Navin Peiris Senior Director, Model Development

CONCLUSIONS 1.  Detailed exposure data is vital for an accurate estimate of losses

2.  An engineering based vulnerability approach is most robust for flood

3.  Losses from real events can be estimated accurately in real time

4.  Lessons learned from reconnaissance feed into model science

ABOUT RMS RMS is the world’s leading provider of products, services, and expertise for the quantification and management of catastrophe risk. More than 400 leading insurers, reinsurers, trading companies, and other financial institutions rely on RMS models to quantify, manage, and transfer risk. As an established provider of risk modeling to companies across all market segments, RMS provides solutions that can be trusted as reliable benchmarks for strategic pricing, risk management, and risk transfer decisions.

©2014 Risk Management Solutions, Inc. RMS and the RMS logo are registered trademarks of Risk Management Solutions,Inc. All other trademarks are property of their respective owners.


ABOUT RMS RMS is the world’s leading provider of products, services, and expertise for the quantification and management of catastrophe risk. More than 400 leading insurers, reinsurers, trading companies, and other financial institutions rely on RMS models to quantify, manage, and transfer risk. As an established provider of risk modeling to companies across all market segments, RMS provides solutions that can be trusted as reliable benchmarks for strategic pricing, risk management, and risk transfer decisions.

©2014 Risk Management Solutions, Inc. RMS and the RMS logo are registered trademarks of Risk Management Solutions,Inc. All other trademarks are property of their respective owners.


risk on the rise: counting the cost of inland flooding

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