PowerPoint Slides for Professors Spring 2010 Version

1. PowerPoint Slidesfor Professors Spring 2010 Version This file as well as all other PowerPoint files for the book, “Risk Management and Insurance: Perspectives in a Global Economy” authored by Skipper and Kwon and published by Blackwell (2007), has been created solely for classes where the book is used as a text. Use or reproduction of the file for any other purposes, known or to be known, is prohibited without prior written permission by the authors. Visit the following site for updates: http://facpub.stjohns.edu/~kwonw/Blackwell.html. To change the slide design/background, [View]  [Slide Master] W. Jean Kwon, Ph.D., CPCUSchool of Risk Management, St. John’s University101 Murray StreetNew York, NY 10007, USA Phone: +1 (212) 277-5196E-mail: Kwonw@stjohns.edu

2. Risk Management and Insurance: Perspectives in a Global Economy 5. Catastrophe Risk Assessment: Natural Hazards Click Here to Add Professor and Course Information

3. Study Points • Catastrophic events • Definitions • Trends • Types of natural disasters • Gee Gees (Insight 5.3)

4. Swiss Re Definition (2008 Reporting Period) 2008 2007

5. United Nations/Munich Re Definition

6. Frequency of Catastrophes (Figure 5.1) → 2008

7. Number of Victims

8. Insured Losses • Economic reasons explain much of the concentration trend. • People are drawn to areas that hold potential for greater economic prosperity, such as cities. • Personal (preference) reasons explain this concentration trend. Figure 5.2 (updated) Many risks are partially insured!

9. Insured Natural Cats as % of Nonlife Premium1970-2008

10. Types of Natural Disasters Earthquakes Storms Floods Volcanism

11. Storm Volcanic Eruption Earthquake Other Flood Source: World of Natural Hazards (2000) World Map of Natural Hazards

12. Earthquakes • Earthquakes are caused by friction between moving tectonic plates. • Earthquakes originate at fairly well-defined faults. • The Pacific Rim is especially prone to earthquake activity • Ring of Fire (Figure 5.3) • Recent events • 1976 Tangshan, China • 2003 Iranian earthquake • 2005 Kashmir, Pakistan • 2008 Sichuan, China • 2010 Port-au-Prince, Haiti

13. Sichuan, China, Earthquake (2008) 87,000 people killed/missing 4.8 million homeless The Great San Francisco Earthquake (1906) 3,000 people killed $524 million in damage www.drgeorgepc.com http://www.howstuffworks.com/12-of-the-most-destructive-earthquakes.htm Deadliest Earthquakes (Selected)

14. Damghan, Iran Earthquake (856) 200,000 people killed Kanto, Japan, Earthquake (1923) 143,000 people killed aboutjapan.japansociety.org web.mit.edu/4.614/www/images/thumb/1047.jpg Deadliest Earthquakes (Selected)

15. Shansi, China, Earthquake (1556) 830,000 people killed Tangshan, China, Earthquake (1976) 255,000 people killed www.waidev2.com www.soilandhealth.org Deadliest Earthquakes (Selected)

16. Deadliest Earthquakes (Selected) 2005 Kashmir, Pakistan 2010 Port-au-Prince, Haiti

17. Ring of Fire

18. Ring of Fire and Other

19. Tsunamis and Earthquakes • Tsunami • Large, rapidly moving ocean waves produced by the displacement of water caused by earthquakes, landslides, volcanic eruptions or even a sufficiently large meteorite impact. • December 26, 2004, Tsunami near Indonesia Source

20. Canary Islands (Insight 5.1)

21. Canary Islands

22. Storms • Generically known as “tropical storms” • Various names by region • Typhoon • Severe tropical cyclone • Severe cyclonic storm • Tropical cyclone

23. Winterstorm Hurricane Typhoon Cyclone

24. Average No. of Tropical Storms and Hurricanes

25. US Hurricane Season 2007

26. Measurement of Wind Velocity Beaufort Scale Saffir-Simpson Scale

27. Floods • Partial or complete inundation of a normally dry land area caused by an overflow of tidal, river, or lake water or after a heavy rain • 100-year flood • Flood damage can result from a single event, such as a hurricane or thunderstorm. Floods also occur due to repeated exposure to rainfall. Source

28. Is Your Home Safe?

29. Volcanism • Volcano • Vents in the earth’s crust through which gases, molten rock/lava and solid fragments are discharged • Volcanic hazard assessment • Climate change and volcanism

30. Worst Catastrophes – Casualty (History) Haiti 2010? 230,000 Storm and flood in Bangladesh (11/14/1970) → 300,000 Earthquake [M7.5] in China (7/28/1976) → 255,000 Earthquake [M9] and tsunami in Indonesia (12/26/2004) → 220,000 Cyclone Gorky in Bangladesh (4/29/1991) → 138,000 Earthquake [M7.7] and landslide (Pakistan, India, Afghanistan) → 73,300… Heat wave in Europe (6/1/2003) → 35,000 Kobe, Japan, earthquake [M7.2] (1/17/1995) → 6,425

31. Worst Catastrophes – Cost (History) Haiti 2010? Hurricane Katrina in the US (8/25/2005) → $68B Hurricane Ike in the US (9/4/2008)  $25B Hurricane Andrew in the US (8/23/1992) → $23B Terror attacks in the US (09/11/2001) → $22B Northridge earthquake [M6.6] in the US (1/17/1994) → $19B Hurricane Ivan in the US (9/2/2004) → $14B… Earthquake [M9] and tsunami in Indonesia (12/26/2004) → $2B

32. Global Geophysical Events Gee Gees (Insight 5.3) Are we paying enough attention to them?

33. Discussion Questions

34. Discussion Question 1 Is your country of birth or residence immune from natural catastrophe? If not, find the records of recent natural events that caused human casualty, property damage or both. Do they meet the definition of catastrophe by an international organization or insurer?

35. Discussion Question 2 Discuss why tsunamis are closely related to earthquakes.

36. Discussion Question 3 What are the possible factors affecting the rise of natural catastrophes in modern society? Describe the factors also reflecting the environments in the region with which you are familiar (e.g., the Caribbean, northern European or South Pacific).

37. Discussion Question 4 Investigate the process of recovery from Hurricane Katrina (U.S.), the 2004 tsunami (Indian Ocean), the 2010 Haiti earthquake or any major natural catastrophe in recent years. Examine the scale, scope and speed of the process to estimate how long it will take to complete it.