2010 MELBOURNE STORM

2010 PERTH STORM

2010 CHINA FLOODS 2010 PAKISTAN FLOODS

2010 DARFIELD EARTHQUAKE

2010/2011 QUEENSLAND FLOODS

2011 VICTORIA FLOOD

2011 CYCLONE YASI

2011 LYTTELTON EARTHQUAKE

2011 TOHOKU EARTHQUAKE

2010 MELBOURNE STORM

• On the 6th and 7th of March 2010, a series of storms passed through Victoria.

• The most severe storm,

described as a “minicyclone", passed directly over Greater Melbourne, bringing lightning, flash flooding, very large hail and strong winds.

• 15 minute rainfalls of 46mm

were recorded in Melbourne’s west and 25mm at Melbourne airport.

2010 MELBOURNE STORM

• The ICA estimated the insurance cost of this event at AU$1,044M.

• At the height of the storm 100,000 houses were without power in Melbourne.

• Model developers need to account for the complexity of these types of storms where hail, water ingress, flash flood and wind can all contribute to damage.

• In general the damage caused to property was in line with expectations from such a storm.

2010 PERTH STORM

• On 22nd of March 2010, a series of severe thunderstorms occurred in the south west of Western Australia.

• By the afternoon Perth was struck by the storms, which first hit the northern suburbs where 62.8 mm (2.47 in) of rain fell in two hours.

• Hailstones with diameters of 3–5 cm were reported in several suburbs while 6 cm hailstones were measured in the inner city.

• The Fire and Emergency Services Authority responded to more than 3,000 calls for assistance.

2010 PERTH STORM

• Some conjecture exists that suggests this event signalled changing weather patterns, with some commentators arguing this was direct evidence of man-made climate change.

• Research commissioned by Aon Benfield suggests that the number of annual thunder days (see graph) has not changed in Perth from 1950 to 2010.

• Reports that the event has an average recurrence interval of 1-in-50 to 1-in-100 years.

2010 CHINA FLOODS

• Extreme flooding in China began in early May 2010 and lasted through to September.

• Official figures show that flood-related incidents led to approximately 4,000 fatalities or left missing.

• By August, 28 provinces had been affected and over 15 million people had been evacuated.

• 15% more rain fell than in an average year due to unusually severe monsoonal rains.

2010 CHINA FLOODS

• Many of the major rivers in China are actively managed during flooding.

• The rapid development of China adds further to the complexity of modelling flood risk in the country.

• While the economic losses from these flood-related disasters were significant, the impact on the insurance industry was limited due to the low insurance penetration levels in China.

• However insurance penetration is growing therefore the potential for larger insured losses from catastrophic events will increase.

2010 PAKISTAN FLOODS

• 2010 Pakistan floods occurred throughout July and August as a result of heavy monsoonal rains.

• Some areas saw more than 4 times the normal monthly rainfall within 3 days.

• 16.5% of Pakistan was inundated.

• 78 of 141 Pakistan’s Districts suffered flood damage (10,860 villages).

• 5.8% of Pakistan’s 2009/10 GDP was lost

2010 PAKISTAN FLOODS

• 2010 floods were the most costly event in Pakistan’s history from an economic perspective.

• Approximately 50% of the loss was agriculture, livestock and fisheries.

• 2010 Pakistan floods highlight the need for better quantification of risks.

2010 DARFIELD EARTHQUAKE

• A magnitude 7.1 earthquake struck Darfield in the early hours of the 4th of September 2010.

• Thankfully, casualties were few. In general buildings responded very well to shaking with most damage the result of liquefaction and lateral spreading.

• The severity of liquefaction and lateral spreading in some areas greatly exacerbated building and infrastructure damage and rendered many suburbs uninhabitable.

2010 DARFIELD EARTHQUAKE

• The total economic loss from the Darfield Earthquake is as yet unknown. Current estimates suggest a NZ$6.25b to NZ$7.5b (US$5.13b to US$6.15b) range.

• Never before had the EQC and the insurance industry been required to settle so many claims (>160,000). This volume put considerable strain on already complex relationships.

• The impact of damage to lifelines in Christchurch highlighted the vulnerability of time element protections (e.g., BI, additional living expenses).

2010/11 QUEENSLAND FLOODING

• Significant flooding occurred in many areas of Queensland during late December 2010 and early January 2011, with three quarters of the state declared a disaster zone.

• The Bureau of Meteorology categorised the rainfall into 6 major events, between the 28th of November and the 15th of January

• On the 10th of January, a dramatic flash flood occurred in the inland city of Toowoomba. Flood waters inundated Brisbane on the 11th January of peaking on the 13th.

2010/11 QUEENSLAND FLOODING

• The Insurance Council of Australia currently reports over 57,000 claims with an estimated insured cost of approximately AU$2.45 billion.

• In order to assess flood risk accurately, flood heights and return periods need to be identified at the individual property level, therefore requiring high resolution accurate data.

• This event highlighted uncertainty around what is deemed flood coverage and the difficulties that arise with policy definitions and language.

2011 CYCLONE YASI

• Cyclone Yasi made landfall between Innisfail and Cardwell on the 3rd of February 2011.

• Banana and sugarcane plantations were severely damaged; power, telecommunications and the mining industry also took a huge hit. Approximately 180,000 homes lost power.

• The maximum winds from Yasi maximum gust 285km/h) were stronger than those from Larry in 2006.

• Storm surge heights reached up to 5.4 metres

2011 CYCLONE YASI

• Insurance losses were less than those from Cyclone Tracy in 1974. This is largely attributed to the stringent building codes in force since 1980.

• Like Larry before it, BOM reports (developed for life safety) overestimated the storm category. This creates challenges in using BOM information for “real-time” reinsurances in cyclones.

• Significant variations in the categorisations between the US and Australia must be recognised when viewing global cyclone risk.

2011 VICTORIA FLOODING

• Approximately one-third of Victoria experienced some form of flooding or storm damage.

• High intensity rainfall periods in the first half of January caused major flooding across much of the western and central regions of the state.

• On 4th February, a weather system formed from the remnants of Tropical Cyclones Anthony and Yasi, causing damaging winds and flash flooding in Melbourne and surrounding districts.

• 1,500 properties were flooded and over 17,000 homes lost their electricity supply.

2011 VICTORIA FLOODING

• The recent high precipitation rates in eastern Australia correlate with a strong manifestation of La Niña.

• There is consensus that large scale weather patterns will be affected by climate change leading to a change in the frequency of extreme weather disasters.

• The February storm and flash flooding was a remnant weather system of Tropical Cyclones Anthony and Yasi and therefore a sequential weather pattern that could be interpreted as one event.

2011 LYTTELTON EARTHQUAKE

• The Lyttelton Earthquake occurred on 22nd February with a magnitude of 6.3 and a shallow depth of 5 kilometres.

• The proximity of the epicentre to the city, and its shallow depth, meant shaking intensities in metropolitan Christchurch were one to two orders of magnitude higher than those in the M7.1 Darfield Earthquake

• Liquefaction and lateral spreading caused tremendous damage to many areas – approx. 6,000 houses will not be rebuilt.

• The Lyttelton Earthquake claimed 181 lives and over 1,500 people were injuries.

2011 LYTTELTON EARTHQUAKE

• This catastrophe has highlighted the need to fully understand the aspects of loss not captured during modelling.

• Liquefaction and lateral spread are considered in most models but even in Christchurch where the potential was recognised, this was underestimated.

• The EQC has logged over 300,000 claims.

• Current estimates suggest the Darfield and Lyttelton earthquakes combined will cost the insurance industry around NZD20b – NZD24b (USD16.4b - USD19.6b)

2011 TOHOKU EARTHQUAKE

• The 11th of March 2011 M9.0 tremor was the largest earthquake event in Japan’s history.

• This event struck 129 kilometres east of Sendai at a shallow depth of 32 kilometres and triggered a major tsunami that caused widespread catastrophic damage and loss of life.

• Japanese government estimates that this event will have an economic impact between JPY 16.2 – 25.3 trillion (USD198 – 309 billion);

• Of this only JPY2.3 – 3.1 trillion (USD 30 – 40 billion) is expected to be borne by the insurance industry.

2011 TOHOKU EARTHQUAKE

• The Tohoku event was characterised by numerous perils, with shaking, tsunami, liquefaction, landslide, partial nuclear meltdown, flooding and fire all occurring.

• These combining forces illustrate the need to understand what is modelled in an application, and where shortcomings of any model may exist.

• The effect of the tsunami losses has once again highlighted the need for detailed modelling of tsunami risk.

• Contingent BI effects of this event have highlighted the interdependency of modern economies.

Losses 2010/11- Estimate as at 30 August 2011

Catastrophe Event Date Est. Insured Losses (AUDm)

Est RI Losses (AUDm) Reference

Melbourne Storm Vic 6-Mar-10 1,300 500 ICA – Insurer reported reserve value + reported loss data

Perth Storm WA 22-Mar-10 1,300 500 ICA – Insurer reported reserve value + reported loss data

Darfield Earthquake NZ 4-Sep-10 5,000 – 6,000 3,000 – 4,000 Reported loss data + Aon Benfield NZ expert estimate

Central Queensland Floods 21-Dec-10 1,300 – 1,400 900

ICA – Insurer reported reserve values and reported loss data +

Aon Benfield estimated in addition

Brisbane - Toowoomba Floods Jan-11 2,200 1,700 Victoria Flooding 13-Jan-11 140 40 T.C. Yasi Qld 2-Feb-11 1,300 400 - 500 Victoria Severe Storms 4-Feb-11 400 150 Perth Bushfire Feb-11 35 >2

Lyttelton Earthquake NZ 22-Feb-11 ~12,500 – 13,500 ~8,500 – 9,000 Reported loss data + Aon Benfield NZ expert estimate

Sumner Earthquake NZ 13-Jun-11 > 1,500 ~700 Reported loss data + Aon Benfield NZ expert estimate

Total 26,975 – 29,075 16,392 – 17,992

Observations

• Asia Pacific is subject to a wide range of natural disasters • The interaction of natural disasters and our complex society has led

to new sources of risk • Recent events have surfaced many issues:

– Frequency plus severity – Event definitions – Interaction of events – Real time storm intensity – Human influence in disasters (such as flood control) – Supply chain – Secondary perils (such as nuclear release following an earthquake)