Natural Catastrophe Year in Review 2016 Catastrophe Exposure & Risk Management Services 2 Contents | Natural Catastrophe Year in Review 2016
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NATURAL CATASTROPHE YEAR IN REVIEW 2016 CATASTROPHE EXPOSURE & RISK MANAGEMENT SERVICES 2 CONTENTS | NATURAL CATASTROPHE YEAR IN REVIEW 2016 CONTENTS FORT MCMURRAY WILDFIRE .................................. 4 CHINA FLOODING: SUMMER 2016 ......................... 7 JUNE 2016 EUROPEAN FLOODS .......................... 10 U.S. FLOOD ........................................................... 13 2016 EARTHQUAKE RETROSPECTIVE ................. 15 2016 WEST PACIFIC TYPHOON SEASON ............. 18 ATLANTIC HURRICANE SEASON .......................... 21 U.S. SEVERE CONVECTIVE STORM ...................... 24 BIOGRAPHIES ....................................................... 27 NATURAL CATASTROPHE YEAR IN REVIEW 2016 | INTRODUCTION 3 INTRODUCTION Natural catastrophe risk in 2016 made headlines across the globe, with flood and earthquake events leading the loss profile from an economic vantage point. From an insured loss perspective, regional extremes in weather conditions drove catastrophic outcomes. Drought across North America spurred some of the most damaging wildfires in history, with the Fort McMurray, Alberta and Gatlinburg, Tennessee events generating damages and losses far beyond the expectations of regional authorities. Persistent thunderstorms across Texas from late March to early May resulted in four massive hail events, contributing significantly to U.S. insured losses in 2016. JLT Re is proactively helping clients manage these catastrophic extremes, offering its expertise and technology to drive bespoke solutions. New analytic products for the perils of wildfire and flood were deployed during 2016, while JLT Re’s CATography Peril Impact and Claims products leverage predictive analytics to aid companies in rapidly assessing incurred loss outcomes from wildfire, convective storm, tropical cyclones, and earthquakes. Expanding capabilities in Asia Pacific are accelerating opportunities for JLT Re to deploy world-class solutions to address the insured protection gap across the region as population growth accelerates in coastal regions exposed to typhoons and flood. While the U.S. continues an unprecedented and miraculous stretch of 11 seasons since a major landfalling hurricane, JLT Re meteorologists continue to delve deeply into analytical solutions for hurricane risk assessment, as reversion to the long-term mean will eventually occur. JLT Re catastrophe specialists, engineers and scientists have compiled a review of the major catastrophe events of 2016 along with professional opinions of leading research and trends that will advance our ongoing understanding of natural catastrophe risk. On behalf of the team responsible for this compilation, we appreciate your interest and look forward to thoughtful engagements and further advancement of catastrophic risk in 2017. Kind regards, Christopher Zumbrum Catastrophe Risk Management Services Officer 4 FORT MCMURRAY WILDFIRE | NATURAL CATASTROPHE YEAR IN REVIEW 2016 FORT MCMURRAY WILDFIRE Kimberly Roberts: Vice President and Meteorologist, Denver, CO Ushered in by abnormally hot and MODIS land surface dry conditions in Canada due to the temperature from 26 winter mega El Niño event, a wildfire April to 3 May 2016, compared to the sparked on 1 May 2016 led not only 2000-10 average for to catastrophic damage to the town of the same one-week Fort McMurray, Alberta, but also to the period. largest economic and insured loss event (Source: NASA Earth in Canadian history. Observatory) Due to El Niño, the winter preceding the fire had been characterized by below- normal snowfall and above-average temperatures in Alberta, which persisted into the spring. By 1 May temperatures were 15ºC above normal across much of Alberta while rainfall had been only half of the long-term average during the month of April. The combination of high temperatures and low precipitation was the main driver of drying out of the forest litter, which exacerbated vulnerability to wildfire. MODIS fire activity detection as of 4 May The initial fire near Fort McMurray began at 14.45, illustrating the on 1 May 2016 and is believed to have very quick spread of fire over a 24-hour time been caused by human activities rather period starting 3 May than lightning, although an investigation represented by orange to the exact cause continues. By 3 May and red dots. local weather conditions were extremely (Source: NASA Earth favorable for a rapid spread of fire. Observatory) Temperatures in Fort McMurray peaked at 32ºC (nearly double the normal high for the day), humidity was at an extreme low of 15%, and strong winds from south and southwest rapidly advanced the fire toward the populated areas of Fort McMurray on 4 May. NATURAL CATASTROPHE YEAR IN REVIEW 2016 | FORT MCMURRAY WILDFIRE 5 Pyrocumulus cloud forming over the evacuation route out of Fort McMurray. (Source: Fort McMurray Wildfire/ Instagram) IN TOTAL, THE FORT Damage Estimates for neighborhoods in MCMURRAY WILDFIRE Fort McMurray. CHARRED MORE THAN (Source: CatIQ and 1.43M ACRES OF LAND AND CATography) DESTROYED AT LEAST 10% OF THE CITY. While ambient weather conditions (temperature, humidity, and winds) played a large role in developing the fire, intense fires like Fort McMurray can create their own weather systems which can further intensify the fire. In extreme cases like this, a pyrocumulus cloud can develop above the heat source. These massive clouds, similar to a large thunderstorm cloud, can generate to the north of town. During this time, catastrophic. Certain neighborhoods updrafts and downdrafts of very strong fire-fighting efforts were outpaced by experienced near total loss, including winds that can spread fire at extremely the exceptional rate of spread of the fire. the Waterways, Abasand and Beacon high rates. The fire became impossible to contain Hill subdivisions, with moderate damage as strong drafts generated by the fire across much of the city. In total, the Evacuations began in earnest on 3 itself carried embers and burning debris Fort McMurray wildfire charred more May, resulting in a displacement of over far ahead of the fireline, and in some than 1.43m acres of land and destroyed 88,000 people from the city of Fort cases, across natural barriers like the at least 10% of the city. McMurray, with further evacuations Athabasca and Hangingstone Rivers. In addition to physical damage to ordered as the fire spread in the The resulting damage from the fire was nearly 2,400 residential structures, following days toward oil sands facilities >> 6 FORT MCMURRAY WILDFIRE | NATURAL CATASTRAOPHE YEAR IN REVIEW 2016 23 commercial/industrial structures, and 10,000+ automobiles, the fire also caused major disruption to oil sands operations losing 47m barrels in production and CAD $1.4bn in potential revenue. Many residents were displaced from their homes for up to one month and required alternate shelter and food during that time, resulting in large additional living expense claims. Rounding out the impacts were losses from business interruption, smoke and water remediation costs, and loss of rental income while repairs are ongoing. In terms of global economic catastrophic losses in 2016, at CAD$5.3bn according to CatIQ, the Fort McMurray fire was eclipsed only by earthquakes in Japan and New Zealand, Hurricane Matthew, and floods in central Europe. It was the costliest catastrophe in the history of Canada, being unique in the fact that the majority of the loss (CAD$3.98bn) is being absorbed by the insurance industry. Not only are the Canadian markets being impacted, but losses are being distributed globally in the form of reinsurance recoveries. While Fort McMurray was the largest and most devastating wildfire complex of 2016 for the insurance industry, the late season Gatlinburg, wildfires in Tennessee destroyed over 2,500 structures with estimated losses in excess of USD$500m. To put the Gatlinburg fire into perspective, had this transpired in California it would rank as the third most damaging in state history for structures destroyed Kimberly Roberts: and fatalities. Vice President and Meteorologist, Denver, CO Please see page 29 for Kimberly’s biography NATURAL CATASTRAOPHE YEAR IN REVIEW 2016 | CHINA FLOODING: SUMMER 2016 7 CHINA FLOODING: SUMMER 2016 Apoorv Dabral: Qingyao Yu: Jessica Turturro: Head of Catastrophe Catastrophe Analyst, Assistant Vice President, Modelling, APAC, Singapore Singapore New York, NY Serious flooding on Lian Road in the Jiujiang District of Jiangxi, China on 19 June 2016. (Source: humphery / Shutterstock.com) OVERVIEW those which led to the devastating RAINFALL floods in 1998. Over 31million people From mid-June to early July 2016, heavy were affected by the flooding, including Known as 'plum rain season', June to rains impacted the basin of the Yangtze 164 fatalities and 26 missing persons. July is the typical rainy season of the River, particularly the midstream and The floods also had a serious agricultural mid to downstream basin of the Yangtze downstream provinces of Hubei, Anhui, impact. Of areas sown with crops,2.7m River. In 2016, rainfall which occurred Hunan, and Guizhou. Until 8 July, hectares were affected 673.6k of those during the 'plum rain season' was much excessive rainfall led to the economic being totally destroyed. Initial estimates heavier in both intensity and duration, loss of over RMB67.8bn across 11 show the insurance loss just in the Hubei and resulted in severe flood, landslide, affected provinces. Favorable flooding province could reach up to RMB65.3m, and debris flow. conditions are being attributed