CAS Ratemaking Seminar March 11-13, 2001 Dr. Graham R. Cook Principal Modeler

1. MODELING TORNADO AND HAILSTORM CAS Ratemaking Seminar March 11-13, 2001 Dr. Graham R. Cook Principal Modeler Confidential

2. THE WEAPONS OF INTENSE CONVECTIVE STORMS Solar-heated, unstable air sets up a strong convective circulation • Wind • Tornadoes • Squall ‘straight-line’ wind • Hail • Large hail drives powerful downdraft winds • Rain • Flash flood • Internal building damage (following wind / hail roof damage) • Lightning Confidential

3. DIFFERENT SPECIES OF THUNDERSTORMS • Major ‘super-cell’ thunderstorms develop where solar-heated sub-tropical air is trapped beneath cool dry air • Tornadic storms form from major atmospheric shear • Strong association with jet-stream • Strong temperature contrast • Major hail • Instability in lee of topography • Requires moderate levels of shear (or falling hail reduces convection) • Restricted climate window • Flash-flood storms • Slow forward speeds • Common to find outbreaks spaced 50-100km (30-60mi) apart Confidential

4. thick cloud light rain heavy rain /small hail large hail updraft front wind vector GUST-FRONT STORM Storm motion Confidential

5. thick cloud light rain heavy rain /small hail large hail updraft wall-cloud front wind vector TORNADIC STORM Storm motion Confidential

6. TORNADO HAIL LOSS MODELING • Regional hazard model • For specific cities (e.g. midwestern US and Canada, Sydney, Munich, etc.) hailstorm is dominant PML down to 200-year return periods • Specific high resolution city models • Potential to underwrite defensively • Cat losses are either individual tracks hitting a city or multi-track regional events • Strong seasonality • Climatic controls Confidential

7. DEFINITION OF OUTBREAK • Refers to family of storms spawned by same general weather system • End of one outbreak and start of another marked by greater than six-hour lull in activity • Not necessarily confined to a single calendar day Confidential

8. TORNADO INTENSITY RATINGS Confidential

9. PERCENTAGE OF TORNADOES Confidential

10. UNREPORTED TORNADOES • Estimate number of tornadoes not reported in records • Distributed by F-Scale • Two most important factors affecting reporting efficiency • Population density • Land use Confidential

11. TORNADO AVERAGE DIMENSIONS Confidential

12. RECENT U.S. TORNADO ACTIVITY Date Location Property Damage Dec 2000 AL ??? March 2000 TX > $450 Million Feb 2000 GA > $25 Million May 1999 OK, KS > $1.0 Billion Jan 1999 AR, TN > $1.3 Billion Feb 1998 FL > $60 Million May 1997 TX > $75 Million Confidential

13. MAJOR TORNADO CATASTROPHE EVENTS Property Damage Date Location (in $ Millions) 4/3-4/74 OH, IN, KY, etc. $1,800 5/5-6/95 TX, NM $1,200 4/18/53 GA (Rough Est.) $980 4/28/92 TX, OK... $970 4/11/65 AR, IL, IN, MI, OH... $930 7/11/90 CO $900 4/25/94 TX, OK … $855 Losses in Current Dollars Confidential

14. RECENT ACTIVITY: MIAMI, 12 MAY 1997 Life of a tornado is typically a few minutes to 1 hour Confidential

15. DOWNTOWN MIAMI: 12 MAY 1997 Forward speeds typically 20-50mph Confidential

16. OKLAHOMA TORNADO OUTBREAK:3 MAY 1999, 8 STORMS Confidential

17. TORNADO SWATH INTENSITIES Confidential

18. PATH WIDTH DISTRIBUTION - F5 - 400 YDS WIDE Confidential

19. US TORNADO ACTIVITY Confidential

20. TORNADO LOSS COSTS - 250 YEARS SIMULATION Confidential

21. TORNADO LOSS COSTS - HISTORICAL SIMULATION Confidential

22. TORNADO CLUSTER - APRIL 1974 Confidential

23. TORNADO CLUSTER - MAY 1999 Confidential

24. DEFINITION OF AN “EVENT” FOR TORNADO LOSS MODELING • Individual tracks • Change of Fujita Intensity along path • Continuity • Track length vs max. severity • Track width vs max. severity • Tornado outbreaks can be characterized from • Regional extent of super-cell storms • Number of storms/tracks • Storm/track density • Distribution of track lengths • Distribution of severities Confidential

25. SIMULATED TORNADO EVENT Confidential

26. HISTORICAL EVENT LOSS Confidential

27. HISTORICAL EVENT LOSS Confidential

28. SIMULATED EVENT LOSS Confidential

29. SIMULATED EVENT LOSS Confidential

30. CLUSTERING OF TORNADO EVENTS Confidential

31. TORNADO RESOLUTION Confidential

32. TORNADO RESOLUTION Confidential

33. HAILSTORMS • Water droplets in updraft freeze as they cool with altitude • Hailstones falling off updraft, become recycled • Requires wind shear • Process repeats until hail too large to be held aloft • Updrafts can be in excess of 100mph • Hailstorms can be associated with a variety of frontal conditions • ‘Airmass’ conditions create the largest hailstreaks with the biggest hail • Hot sub-tropical air trapped beneath cool dry air • Footprints > 2x area of frontal hailstorms • Max hail size 60% larger than frontal hailstorms Confidential

34. WORLDWIDE HAILSTORM ACTIVITY Confidential

35. U.S. HAIL ACTIVITY Confidential

36. U.S. HAIL REGIONS Confidential

37. HAIL LOSS COSTS - 250 YEARS SIMULATION Confidential

38. HAIL LOSS COSTS - HISTORICAL SIMULATION Confidential

39. RECENT HAILSTORM CATASTROPHIC LOSSES Location Date Loss Munich July 12, 1984 $US 500 M ($1.5 Bn 1999) Sydney March 18,1990 $A 500 M Sydney 1999 $A 1000 M Calgary July 9, 1991 $325 M Edmonton July 31, 1987 $330 M Denver July 11, 1990 $625 M TX/LA June 5,1995 $1.13 Bn Minnesota 1998 $1.3 Bn (hail and tornado) IA, WI, IL, IN 2000 $350 Million In most cases, majority of loss in a single city Confidential

40. METEOROLOGY OF HAIL Updraft required for hail formation increases with hailstone size Hailstone Size Min. Updraft Velocity 0.5 inch (12.5mm) 22 mph 0.75 inch (19mm) 37 mph 1.75 inch (44mm) 56 mph 3.0 inch (76mm) 100 mph Confidential

41. DIURNAL ACTIVITY OF INTENSE HAILSTORMS Hail Size Sunset Sunrise Confidential

42. HAILSTONE SIZING Diameter Size (mm) Description 1 5-10 Pea 2 11-15 Mothball, bean, hazelnut 3 16-20 Marble, cherry, small grape 4 21-30 Large marble, large grape, walnut 5 31-45 Chestnut, pigeon’s egg, table-tennis ball, golf ball, squash ball 6 46-60 Hen’s egg, small peach, small apple 7 61-80 Large peach, large apple, small-medium orange, tennis ball, cricket ball, baseball 8 81-100 Large orange, grapefruit 9 101-125 Melon 10 over 125 Coconut, etc. Confidential

43. THE HAILSTORM FOOTPRINT • Damaging Hail Swath: • typically few miles wide • up to 200 miles long • big hail more likely in • long swaths Confidential

44. Cool dry air Hot humid air THE MOUNTAIN EFFECT • Many of the largest and most damaging catastrophic hailstorms found in lee of mountains Convective instability Major super-cell storm Confidential

45. MAXIMUM HAIL SIZE IS CONTROLLED BY LOCAL FACTORS Frequency not simply equated to severity Confidential

46. EDMONTON St Albert Residential areas Hail >3cm >5cm >6cm Tornado F2-F3 F3-F4 Sherwood Park Mill Woods 5km EDMONTON STORM: JULY 31, 1987 Confidential

47. HAIL AREA REPRESENTATION Confidential

48. 0 0.25 345 15 330 30 0.2 315 45 0.15 300 60 0.1 285 75 0.05 270 0 90 255 105 240 120 225 135 210 150 195 165 180 HAIL STORM TRACK ORIENTATION Directional distribution of hailstorms with areas of damage (H3) of 50 km2 or more (Switzerland) Confidential

49. 100 10 % of storms larger than 1 0.1 1 10 100 1,000 10,000 Area of H3 (km2) HAILSTORM SIZE DISTRIBUTION Confidential

50. Every Year 100% Once every 10 yrs 10% Annual Probability of Occurrence Once every 100 yrs 1% Once every 1000 yrs 0.1% H1 H7 H2 H3 H4 H5 H6 Hail Intensity Using Torro Intensity Scale HAIL STORM HAZARD PROBABILITY AT A LOCATION Confidential