FROM BACKGROUND to FRONT Catastrophe Modelling – a Quick Tour
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FROM BACKGROUND TO FRONT Catastrophe Modelling – a quick tour Lawrence Cheng Peak Re May, 2015 Colour palette for PowerPoint Primarypresentations colour palette Dark blue R17 G52 B88 Gold R217 G171 B22 Outline Mid blue R64 G150 B184 Light grey R220 G221 B217 • Why do we need Catastrophe Model? Secondary colour palette Dark grey • Evolution of Catastrophe Models R63 G69 B72 Pea green R121 G163 B42 • How to build a Catastrophe Model Forest green R0 G132 B82 • Risk Management Bottle green R17 G179 B162 Cyan R0 G156 B200 Light blue R124 G179 B225 Violet R128 G118 B207 Purple R143 G70 B147 Fuscia R233 G69 B140 Red R200 G30 B69 Orange 2 R238 G116 29 Colour palette for PowerPoint Primarypresentations colour palette Dark blue R17 G52 B88 Gold R217 G171 B22 Why do we need Catastrophe Model? Mid blue R64 G150 B184 Light grey R220 G221 B217 Secondary colour palette Dark grey R63 G69 B72 Pea green R121 G163 B42 Forest green R0 G132 B82 Bottle green R17 G179 B162 Cyan R0 G156 B200 Light blue R124 G179 B225 Violet R128 G118 B207 Purple R143 G70 B147 Fuscia R233 G69 B140 Red https://www.opendemocracy.net/wataru-sawamura/japan-earthquake-and-media R200 G30 B69 http://www.theatlantic.com/infocus/2013/03/japan-earthquake-2-years-later-before-and-after/100469/ http://www.ibtimes.co.uk/japan-2011-earthquake-tsunami-30-powerful-images-1439673 Orange http://www.coastal.jp/tsunami2011/index.php?Field%20survey%20results http://yonasu.com/landslide-caused-by-earthquake-in-japan/ 3 R238 G116 29 http://coastalcare.org/2011/04/japan-quake-caused-surprisingly-severe-soil-collapse/ http://en.wikipedia.org/wiki/Fukushima_Daiichi_nuclear_disaster Colour palette for PowerPoint Primarypresentations colour palette Dark blue R17 G52 B88 Gold R217 G171 B22 What are Catastrophes? Mid blue R64 G150 B184 Light grey R220 G221 B217 • Infrequent events that cause severe loss, injury or Secondary colour palette property damage to a large population of exposure. Dark grey R63 G69 B72 Pea green R121 G163 B42 Forest green R0 G132 B82 • The term is most often associated with natural events. Bottle green R17 G179 B162 – Examples: Earthquake, Flood or Typhoon Cyan R0 G156 B200 Light blue R124 G179 B225 Violet • It can also be used when there is concentrated or R128 G118 B207 Purple widespread damage from man-made disasters R143 G70 B147 Fuscia – Examples: Fires, Explosion, or Terrorism. R233 G69 B140 Red R200 G30 B69 Orange 4 R238 G116 29 Colour palette for PowerPoint Primarypresentations colour palette Dark blue R17 G52 B88 Gold R217 G171 B22 Traditional Ways? Mid blue R64 G150 B184 Light grey 18% CAT Loss Ratio R220 G221 B217 17% Secondary colour palette 16% Average: 4% Dark grey R63 G69 B72 14% Pea green R121 G163 B42 12% Forest green R0 G132 B82 10% Bottle green R17 G179 B162 8% Cyan R0 G156 B200 6% Light blue R124 G179 B225 4% 3% Violet R128 G118 B207 2% 1% Purple 0% 0% R143 G70 B147 0% Fuscia 1971 1972 1973 1974 1975 R233 G69 B140 Red R200 G30 B69 Orange 5 R238 G116 29 Colour palette for PowerPoint Primarypresentations colour palette Dark blue R17 G52 B88 Gold R217 G171 B22 Traditional Ways? Mid blue R64 G150 B184 Light grey 18% CAT Loss Ratio R220 G221 B217 17% Secondary colour palette 16% Average: 3% Dark grey R63 G69 B72 14% Pea green R121 G163 B42 12% Forest green R0 G132 B82 10% Bottle green R17 G179 B162 8% Cyan R0 G156 B200 6% Light blue R124 G179 B225 4% 3% Violet 2% 2% R128 G118 B207 2% 1% 1% Purple 0% 0% 0% R143 G70 B147 0% Fuscia 1971 1972 1973 1974 1975 1976 1977 1978 1979 R233 G69 B140 Red R200 G30 B69 Orange 6 R238 G116 29 Colour palette for PowerPoint Primarypresentations colour palette Dark blue R17 G52 B88 Gold R217 G171 B22 Traditional Ways? Mid blue R64 G150 B184 Light grey 18% CAT Loss Ratio R220 G221 B217 17% Secondary colour palette 16% Average: 3% Dark grey R63 G69 B72 14% Pea green R121 G163 B42 12% Forest green R0 G132 B82 10% 9% Bottle green R17 G179 B162 8% Cyan R0 G156 B200 6% Light blue R124 G179 B225 4% 3% 3% Violet 2% 2% R128 G118 B207 2% 1% 1% 1% Purple 0% 0% 0% 0% R143 G70 B147 0% Fuscia 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 R233 G69 B140 Red R200 G30 B69 Orange 7 R238 G116 29 Colour palette for PowerPoint Primarypresentations colour palette Dark blue R17 G52 B88 Gold R217 G171 B22 Traditional Ways? Mid blue R64 G150 B184 Light grey 25% CAT Loss Ratio R220 G221 B217 23% Secondary colour palette Average: 5% Dark grey R63 G69 B72 20% Pea green 17% R121 G163 B42 Forest green 15% R0 G132 B82 Bottle green 12% R17 G179 B162 Cyan 10% 9% 9% R0 G156 B200 Light blue R124 G179 B225 5% 5% Violet 3% 3% R128 G118 B207 2% 2% 1% 1% 1% 1% Purple 0% 0% 0% 0% R143 G70 B147 0% Fuscia R233 G69 B140 Red R200 G30 B69 Orange 8 R238 G116 29 Colour palette for PowerPoint Primarypresentations colour palette Dark blue R17 G52 B88 Gold R217 G171 B22 Traditional Ways? Mid blue R64 G150 B184 Light grey 140% CAT Loss Ratio R220 G221 B217 130% Secondary colour palette 120% Average: 12% Dark grey R63 G69 B72 1989 Loma Prieta Earthquake Pea green 100% R121 G163 B42 M6.9, 18KM Forest green R0 G132 B82 80% Bottle green R17 G179 B162 60% Cyan R0 G156 B200 Light blue 40% R124 G179 B225 23% Violet 17% R128 G118 B207 20% 12% 9% 9% 3% 3% 5% Purple 0% 1% 0% 0% 1% 2% 2% 1% 0% 1% R143 G70 B147 0% Fuscia R233 G69 B140 Red R200 G30 B69 Orange 9 R238 G116 29 http://en.wikipedia.org/wiki/1989_Loma_Prieta_earthquake Colour palette for PowerPoint Primarypresentations colour palette Dark blue R17 G52 B88 Gold R217 G171 B22 Traditional Ways? Mid blue R64 G150 B184 Light grey 140% CAT Loss Ratio R220 G221 B217 130% Secondary colour palette 120% Average: 13% Dark grey R63 G69 B72 Pea green 100% R121 G163 B42 Forest green R0 G132 B82 80% Bottle green R17 G179 B162 60% Cyan 47% R0 G156 B200 Light blue 40% R124 G179 B225 23% 23% Violet 17% 17% R128 G118 B207 20% 12% 9% 9% 3% 3% 5% 3% Purple 0% 1% 0% 0% 1% 2% 2% 1% 0% 1% R143 G70 B147 0% Fuscia R233 G69 B140 Red R200 G30 B69 Orange 10 R238 G116 29 Colour palette for PowerPoint Primarypresentations colour palette Dark blue R17 G52 B88 Gold R217 G171 B22 Traditional Ways? Mid blue R64 G150 B184 Light grey 2500% CAT Loss Ratio R220 G221 B217 2273% Secondary colour palette Average: 108% Dark grey R63 G69 B72 2000% 1994 Northridge Earthquake Pea green R121 G163 B42 M6.7, 19KM Forest green 1500% R0 G132 B82 Bottle green R17 G179 B162 Cyan 1000% R0 G156 B200 Light blue R124 G179 B225 500% Violet R128 G118 B207 130% Purple 17% 0% 1% 3% 0% 0% 1% 2% 2% 9% 1% 0% 3% 5% 1% 9% 23%12% 47%17% 23% 3% R143 G70 B147 0% Fuscia R233 G69 B140 Red R200 G30 B69 Orange 11 R238 G116 29 http://en.wikipedia.org/wiki/1994_Northridge_earthquake Colour palette for PowerPoint Primarypresentations colour palette Dark blue R17 G52 B88 Gold R217 G171 B22 Why do we need Catastrophe models? Mid blue R64 G150 B184 Light grey R220 G221 B217 • High severity of events: Importance of accurately Secondary colour palette estimating losses Dark grey R63 G69 B72 Pea green R121 G163 B42 Forest green R0 G132 B82 • Company experience inadequate due to long return Bottle green periods and historical change of portfolio’s geographic R17 G179 B162 Cyan characteristics R0 G156 B200 Light blue R124 G179 B225 Violet R128 G118 B207 • Provide for a better understanding of risk and the Purple R143 G70 B147 vulnerability of a company’s assets to this risk Fuscia R233 G69 B140 Red R200 G30 B69 Orange 12 R238 G116 29 Colour palette for PowerPoint Primarypresentations colour palette Dark blue R17 G52 B88 Gold R217 G171 B22 Evolution of Catastrophe Models Mid blue R64 G150 B184 Light grey R220 G221 B217 Secondary colour palette Dark grey R63 G69 B72 Pea green R121 G163 B42 Forest green R0 G132 B82 Bottle green R17 G179 B162 Cyan R0 G156 B200 Light blue R124 G179 B225 Violet R128 G118 B207 Purple R143 G70 B147 Fuscia R233 G69 B140 Red R200 G30 B69 Orange 13 R238 G116 29 http://www.techgeeze.com/2014/01/evolution-mobile-phone.html Colour palette for PowerPoint Primarypresentations colour palette Dark blue R17 G52 B88 Gold R217 G171 B22 Some History Mid blue R64 G150 B184 Light grey 1987 AIR R220 G221 B217 1988 RMS and Hurricane Gilbert Secondary colour palette 1989 Hurraine Hugo/Loma and Prieta Earthquake Dark grey R63 G69 B72 1991 Typhoon Mireille Pea green 1992 Hurriane Andrew R121 G163 B42 1994 EQECAT and Northridge Earthquake Forest green 1995 Kobe Earthquake R0 G132 B82 Bottle green 1999 Europe Winter Storm R17 G179 B162 2001 911 Attack Cyan 2003 RMS Model for Terrorism R0 G156 B200 2004 Indian Ocean Earthquake and Tsunami Light blue R124 G179 B225 2005 Hurricane Katrina Violet 2008 Wenchuan Earthquake R128 G118 B207 2011 Japan Earthquake and Thai-Flood Purple R143 G70 B147 2013 Typhoon Fitow, Haiyan Fuscia 2014 JP Snow Storm, AU Hail, CN EQ R233 G69 B140 2015 …… Red R200 G30 B69 Orange 14 R238 G116 29 Colour palette for PowerPoint Primarypresentations colour palette Dark blue R17 G52 B88 Gold R217 G171 B22 Models in Asia Mid blue R64 G150 B184 Light grey R220 G221 B217 EQ Model Coverage TY Model Coverage Secondary colour palette Dark grey R63 G69 B72 Pea green R121 G163 B42 Forest green R0 G132 B82 Bottle green R17 G179 B162 Cyan R0 G156 B200 Light blue R124 G179 B225 Violet R128 G118 B207 Purple R143 G70 B147 Fuscia RMS and AIR R233 G69 B140 RMS Only Red AIR Only R200 G30 B69 None Orange 15 R238 G116 29 Colour palette for PowerPoint Primarypresentations colour palette Dark blue R17 G52 B88 Gold R217 G171 B22 Model Outside Asia Mid blue R64 G150 B184 Light grey R220 G221 B217 Secondary colour palette Dark grey R63 G69 B72 Pea green R121 G163 B42 Forest green R0 G132 B82