Mike Waters VP Risk Decision Services Bob Shoemaker Sr. Technical Coordinator. Insurance Services Office, Inc

Transcription

1 Mike Waters VP Risk Decision Services Bob Shoemaker Sr. Technical Coordinator Insurance Services Office, Inc

2 Disasters Large and Small A Convergence of Interests Public and Private ESRI Homeland Security Summit Insurance Services Office, Inc.

3 Disasters Large and Small Natural and man made made Escalation of cascading events from local to national even global Need for collaborative approach convergence of interests amongst public and private sectors Homeland Infrastructure Foundation Level Database (HIFLD) Working Group 3

4 Disasters Large and Small Insurance industry encourages, measures and rewards community hazard mitigation efforts Building Code Enforcement Municipal Fire Protection FEMA/Flood mitigation Trends and concerns highlight the importance Analysis of data and power of visualization GIS data sharing platform to facilitate interest 4

5 Third Coast Industries May 1, 2002 Fi Friendswood, d TX No laws or regulations requiring compliance with codes 1.2 million gallons of combustible & flammable liquids Significant environmental clean-up Permanent loss of over 100 jobs 5

6 Convergent Interests of Public/Private Sector Physical Cyber Human NIPP Risk Management Approach Set Security Identify Assets, Systems, Assess Risks Implement Goals Networks, and (Consequences, Prioritize Protective Functions Vulnerabilities, Programs And Threats) Measure Effectiveness Insurer Risk Assumption Framework Property Liability Workers Comp Set Business Goals Identify Assets, Operations and Entities to Insure Assess Risks (Hazards, Vulnerabilities, and Financial Consequences) Determine Price, Coverage and Reinsurance Implement Programs to Mitigate Loss Measure Effectiveness 6

7 Convergent Interests of Public/Private Sector Physical Cyber Human NIPP Risk Management Approach Set Security Identify Assets, Systems Assess Risks Implement Goals Networks, and, (Consequences, Prioritize Protective Functions Vulnerabilities, Programs And Threats) Measure Effectiveness Insurer Risk Assumption Framework Property Liability Workers Comp Set Business Goals Identify Assets, Operations and Entities to Insure Assess Risks (Hazards, Vulnerabilities, and Financial Consequences) Determine Price, Coverage and Reinsurance Implement Programs to Mitigate Loss Measure Effectiveness 7

8 Convergent Interests of Public/Private Sector Physical Cyber Human NIPP Risk Management Approach Set Security Identify Assets, Systems, Assess Risks Implement Goals Networks, and (Consequences, Prioritize Protective Functions Vulnerabilities, Programs And Threats) Measure Effectiveness Insurer Risk Assumption Framework Property Liability Workers Comp Set Business Goals Identify Assets, Operations and Entities to Insure Assess Risks (Hazards, Vulnerabilities, and Financial Consequences) Determine Price, Coverage and Reinsurance Implement Programs to Mitigate Loss Measure Effectiveness 8

9 Convergent Interests of Public/Private Sector Physical Cyber Human NIPP Risk Management Approach Set Security Identify Assets, Systems, Assess Risks Implement Goals Networks, and (Consequences, Prioritize Protective Functions Vulnerabilities, Programs And Threats) Measure Effectiveness Insurer Risk Assumption Framework Property Liability Workers Comp Set Business Goals Identify Assets, Operations and Entities to Insure Assess Risks (Hazards, Vulnerabilities, and Financial Consequences) Determine Price, Coverage and Reinsurance Implement Programs to Mitigate Loss Measure Effectiveness 9

10 Convergent Interests of Public/Private Sector Physical Cyber Human NIPP Risk Management Approach Set Security Identify Assets, Systems, Assess Risks Implement Goals Networks, and (Consequences, Prioritize Protective Functions Vulnerabilities, Programs And Threats) Measure Effectiveness Insurer Risk Assumption Framework Property Liability Workers Comp Set Business Goals Identify Assets, Operations and Entities to Insure Assess Risks (Hazards, Vulnerabilities, and Financial Consequences) Determine Price, Coverage and Reinsurance Implement Programs to Mitigate Loss Measure Effectiveness 10

11 Convergent Interests of Public/Private Sector Physical Cyber Human NIPP Risk Management Approach Set Security Identify Assets, Systems, Assess Risks Implement Goals Networks, and (Consequences, Prioritize Protective Functions Vulnerabilities, Programs And Threats) Measure Effectiveness Insurer Risk Assumption Framework Property Liability Workers Comp Set Business Goals Identify Assets, Operations and Entities to Insure Assess Risks (Hazards, Vulnerabilities, and Financial Consequences) Determine Price, Coverage and Reinsurance Implement Programs to Mitigate Loss Measure Effectiveness 11

12 Role of ISO Within Insurer Risk Assumption Framework Property Liability Workers Comp Set Business Goals Identify Assess Risks Determine Assets, (Hazards, Price, Operations and Vulnerabilities, Coverage and Entities to and Financial Reinsurance Insure Consequences) Implement Programs to Mitigate Loss Measure Effectiveness Aggregate industry databases, statistical analyses and benchmarks, and tools enabling competition National scope Commercial asset focus Industrial Mercantile Habitational Portfolio view Field validated data Natural perils and man made threats Accurate replacement cost estimates Integrated geographic analyses Projected loss levels Cost trends Loss/expense benchmarks Portfolio impacts Site specific loss control recc s Community level hazard mitigation programs Fire/water Building Code Flood Fraud detection tools 12

13 Insured Property Damage by Cat Family 1950 to 2007 Cat Family Estimated Insured Loss Hurricane (86) $121,666,445,790 Wind and Thunderstorm Event (1198) $95,520,197,458 Winter Storm $23,403,656,159 Fire - Other $20,050,753, Earthquake $13,964,150,000 Wildland Fire $6,467,348,000 Tropical Storm $3,649,320,000 Riot $970,250,000 Water Damage $300,000,000 Utility Service Disruption $180,000,000 Volcanic Eruption $27,000,000 Total Insured Loss (1532) $286,199,121,011 13

14 Direct Insured Catastrophe Losses* 1950 to to 2008 = $274.7 billion Billio ons $65 $62.3 $60 $55 $50 $45 $40 $35 $30 $25 $22.1 $ to 1988 = $19.9 billion $15 $10 $5 $0 '50 '55 '60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '08 * Property losses; figure for 2008 is year to date as of October

15 2008 U.S. Landfall Hurricane Frequency Source: National Hurricane Center. 15

16 Top 10 Hurricanes Based on Today s Exposure Base Event Year Loss* Miami Hurricane 1926 $96 Andrew Fort Lauderdale Hurricane Great Okeechobee Hurricane Katrina Galveston Storm New England Hurricane Betsy Donna Hazel * Billions, estimated using exposures as of 12/31/07 and AIR catastrophe models. 16

17 Growth in the Number of Housing Units Florida 27% Georgia 28% N. Carolina 26% S. Carolina 23% Texas 23% US U.S. 15% Source: U.S. Bureau of the Census 17

18 Estimated 2007 Insured Value of Coastal lproperties by Statet 13 Other States $1.7 trillion 19.7% New Jersey $636 billion 71% 7.1% Massachusetts $773 billion 8.7% Texas $895 billion 10.1% 1% Florida $2.5 trillion 27.7% New York $2.4 trillion 26.8% 18

19 Hurricane Strikes by State 1851 to AR NM PA MD DE NJ NH ME RI VA CT MA NY MS GA AL SC NC LA TX FL Sources: National Hurricane Center and ISO. 19

20 Forecast Population Growth States Exposed to Hurricane 2000 to NY PA LA CT MS AL RI MA ME NJ SC DE MD NH VA GA NC TX FL Source: U.S. Bureau of the Census 20

21 Average Size of Newly Constructed One Family Homes, 1980 to ,600 2,521 2,400 Sq quare Fee et 2,200 2,000 1,800 1,710 1,600 '80 '83 '86 '89 '92 '95 '98 '01 '04 '07 Source: U.S. Bureau of the Census 21

22 Exposure Growth WUI Between 1990 and 2000, the number of people living in very high or extreme fire threat areas of the Sierra grew by 16%. 94% of the land slated for rural residential development in the Sierra is classified by CalFire as very highor extreme fire threat. Between 1990 and 2000, the Sierra s wildland urban interface (or WUI) grew by 131,000 acres, a 12% increase. Better community planning can help reduce the number of lives and homes at risk. Source: Sierra Nevada Alliance 22

23 Exposure Growth Means Catastrophe Losses Will Double Every Ten Years % (20) 2% (50) 1% (100) 0.4% (250) 0.2% (500) 0.1% (1000) Probability (Return Period) 23 Losses include hurricane, earthquake, fire following, winterstorm, severe thunderstorm. Losses include aggregate demand surge.

24 Near and Real Time Event Tracking Four of Eleven Sample Scenarios for Ike Maps indicate postal code level modeled property loss estimates 24

25 Landfall Posting Offers Narrower Range of Possible Tracks Scenario 5: Centered on Best Track Guidance 25

26 Wind Events: Event Scenarios A category 5 hurricane making first landfall in Miami Dade County, FL and then tracking to make a second landfall as a category 4 hurricane in Texas could result in insured losses exceeding $170B. A category 4 hurricane making first landfall in Miami Dade County, FL and then tracking to make a second landfall as a category 4 hurricane in North Carolina could result in insured losses exceeding $160B. Earthquake Events: A magnitude 7.8 earthquake occurring in San Mateo County, CA could result in insured losses exceeding $130B. A magnitude 7.4earthquake occurring in Los Angeles County, CA could result in insured losses exceeding $120B. 26

27 Effective Building Codes LSU Katrina Study $3.1B or 65% reduction in damage Protected building openings Improved roof deck and roof to wall connections National Institute of Building Sciences $1 investment in mitigation yields nearly $4 in reduced losses reduced losses Preliminary post IKE analyses confirm value 27

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29 Community Fire Protection Data ISO collects, analyzes and provides high fidelity data to insurers Community fire protection analysis includes data on over 46K fire protection areas Fire Chief s Online Website portal for data sharing, ISO data on ESRI mapping features Initial launch in 2006 Over 7K authorized fire chiefs registered Major enhancements made in

30 Fire Chiefs Online Commercial properties from ISO s database. 30

31 Fire Chiefs Online Properties with a Needed Fire Flow greater than 3,000 gpm. 31

32 Fire Chiefs Online Individual property profile 32

33 Individual Property Report 33

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35 Conclusion Technology and quality data key to effective, timely decision making Convergent interests of public and private sector to collaborate and help save lives and property in times of disasters large and small. Community level lefforts like strong codes and effective planning can help mitigate the effects of disaster 35

36 Thank You Mike Waters Bob Shoemaker