Real-Time Loss Estimates for Severe Thunderstorm Damage: The Event of April 27-28, 2002

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Philip Darrell Miles
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1 AIR Special Report July 2002 Real-Time Loss Estimates for Severe Thunderstorm Damage: The Event of April 27-28, 2002 Technical Document_LPSR_0207

I. Overview On April 27-28, 2002, a frontal system generated severe thunderstorms that produced tornadoes, hail, and straight-line windstorms across 26 states.

2 I. Overview On April 27-28, 2002, a frontal system generated severe thunderstorms that produced tornadoes, hail, and straight-line windstorms across 26 states. The system was noteworthy in that an unusually severe tornado struck Maryland, far to the east of regions normally associated with intense tornadoes. Given the tornado s proximity to Washington D.C. and its densely populated suburbs, AIR Worldwide Corporation (AIR) made the decision to run the severe thunderstorm model to estimate potential losses. Within days of the event, AIR delivered estimates of insured loss to clients. It was the first time that estimates were provided so soon after the actual occurrence of an event of this type. The AIR severe thunderstorm team collected, cleaned, and analyzed the available data and used them as input to the severe thunderstorm model for the United States. The model produced a range of possible scenarios and corresponding loss estimates, posted on the ALERT (AIR Loss Estimates in Real Time) website, that were later seen to be consistent with survey results issued by Property Claim Services (PCS). April 28 NOAA satellite image of thunderstorms over Maryland and Virginia In the following report, we present a description of the meteorological system of April and of the process by which the AIR team collected and prepared the data for use by the severe thunderstorm model in order to estimate losses. Using material gathered by the AIR post-disaster survey team, we also illustrate the scale of damage for the most severe episode of the frontal system s effects, a tornado rated F-4 on the Fujita Scale that struck La Plata, Maryland, on April AIR Worldwide Corporation SPECIAL REPORT 1

II. Event Description On Saturday and Sunday, April 27-28, 2002, a severe thunderstorm system occurred from Kansas to Maryland, as a vigorous upper-level system moved from the Midwest to the East.

3 II. Event Description On Saturday and Sunday, April 27-28, 2002, a severe thunderstorm system occurred from Kansas to Maryland, as a vigorous upper-level system moved from the Midwest to the East. Warm moist air from the Gulf of Mexico clashed with cold, dry air from Canada to produce damaging tornadoes, hail, and high winds. Information released by the Storm Prediction Center (SPC) of the National Weather Service (NWS) includes 36 reports of tornadoes, 291 of hailstorms, and 188 of straight-line windstorms over the course of 48 hours on April The exact number of discrete occurrences behind these reports will not be known until the data has been analyzed further. Storm Prediction Center reports of tornadoes, hail, and wind for April 27-28, 2002 with inset of F-3 tornado track, Bollinger County Missouri, April 28 An F-3 tornado struck in Union and Johnson counties in Illinois on Saturday, April 27, and an F-2 tornado struck in southeastern Johnson County that same day. Another tornado touched down briefly in Marshall County, West Virginia. Preliminary assessment of a tornado in Rutherford County, Tennessee, suggests it was an F-3 with a path 3.2 miles long and 0.2 miles wide. Another F-2 tornado occurred in Shenandoah County, Virginia. The NWS confirmed that an F-3 tornado touched down Sunday morning in Bollinger County, Missouri, with a path length of 4 miles and a width of 150 to 200 yards AIR Worldwide Corporation SPECIAL REPORT 2

4 The strongest tornado struck La Plata, MD, on Sunday night, April 28, 2002, at about 7:10 p.m., EDT (21:10 GMT). It touched down between the towns of Risen and Marbury and followed a 24-mile path across Charles County, passing near La Plata, the county seat, before continuing on for another 6 miles through Calvert County. An initial damage survey, undertaken by the NWS office in Baltimore, resulted in a rating of F-5 on the Fujita tornado intensity scale. However, a later re-examination of the damage led the National Weather Service to reclassify the tornado as a strong F-4, with a maximum wind speed of 260 mph (418 kph). Severe damage (F-3/F-4) was observed across a path width of about one quarter of a mile and over a length of about five miles. This lay within a broader swath of less severe damage. The path width corresponding to F-1/F-2 damage was estimated at about one mile. The tornado lasted about 45 minutes, according to officials at the NWS. Path of the La Plata tornado showing intensities, as estimated by NOAA, with photos of damage taken by the AIR post-disaster survey team According to the National Oceanic and Atmospheric Administration (NOAA), about 2% of all tornadoes nationally fall into the F4-F5 category. Since 1950, there have been about 51 F-5 tornadoes in the U.S. Maryland has experienced two F-4 tornadoes previously AIR Worldwide Corporation SPECIAL REPORT 3

5 III. The Process of Real-Time Loss Estimation Estimating losses from severe thunderstorm events in real time is a challenging task. Microevents (that is, the individual tornadoes, hailstorms, or straightline windstorms that make up the larger atmospheric system, or macroevent) are typically of short duration sometimes lasting only minutes and more often than not occur out of the range of weather stations or anemometers. When instruments are within range, the force of tornadic winds is so severe they are often destroyed. When no measured wind speeds are available, scientists and engineers must estimate wind speeds from observed damage. The data gathering and analysis process usually takes several months, after which the data enters the official SPC database. In order to deliver loss estimates to clients in near real time, data had to be gathered and processed quickly. Much of the data provided in real time by the SPC are from first-hand observations of microevents (examples are shown in the table below). The AIR team scrutinized each new report to insure its consistency with the emerging picture of the macroevent. Note: All data is considered preliminary Tornado Reports Time F-Scale Location County State Lat Lon Comments 1905 UNK ERIE COUNTY ERIE NY UNK RUSTBURG CAMPBELL VA UNK TREES DOWN, POOL AND SHEDS OVERTURNED, EYEWITNESS REPORT OF FUNNEL REPORTED BY BROADCAST MEDIA PUBLIC REPORT HIGHWAY 29 AND 622 TWIN OAK TRAILER PARK LARGE TREE DOWN UPROOTED AND SNAPPED IN HALF. MOBILE HOME TIPPED AND ROLLED. CHURCH ROOF BLOWN OFF. POWER LINES PUBLIC REPORTED THROUGH SHERIFF DEPT 5 SW WESTMINSTER OCONEE SC 3460 THAT TORNADO TOUCHED DOWN...WITH DOWNED 8317 TREES AND POWER LINES BLOWN DOWN. Sample Preliminary Tornado Reports from SPC April 28, 2002 The AIR team examined the data and eliminated what appeared to be duplicate reports of microevents. Using the cleaned data as input, the severe thunderstorm model was then run using various assumptions regarding model parameters. For reported tornadoes, when windspeed observations were not available, the AIR severe thunderstorm team mapped written descriptions of damage (available from SPC) to wind speeds and produced a Fujita-scale category. Hail and wind events were handled in similar fashion. Hail impact energy, which is a function of the reported hailstone size, the number of hailstones per square meter, and wind speed, was again assumed to be the average for the state. Averages by state were used for straight-line wind speeds except where wind speeds were explicitly reported AIR Worldwide Corporation SPECIAL REPORT 4

IV. Modeled Results As a result of the analysis, AIR estimated, and posted on its ALERT website, that the expected total loss from the storm system, April 27-28, was close to $600 million.

6 IV. Modeled Results As a result of the analysis, AIR estimated, and posted on its ALERT website, that the expected total loss from the storm system, April 27-28, was close to $600 million. Two additional scenarios were posted to reflect the uncertainty in the data. These ranged from a low of $400 million to a high of $800 million. By comparison, Property Claim Service s estimate of insured property damage as of May 16 totaled $700 million. The PCS estimate defined the catastrophe event as lasting from April 27 to May 3, four days longer than the AIR analysis. Modeled losses from April severe thunderstorm event as posted on the ALERT website May 3, 2002 The map below shows AIR modeled losses by state AIR Worldwide Corporation SPECIAL REPORT 5

AIR Expected Losses by State V. Summary AIR posted loss estimates in real time for a severe thunderstorm event that swept across 26 states in late April, 2002.

7 AIR Expected Losses by State V. Summary AIR posted loss estimates in real time for a severe thunderstorm event that swept across 26 states in late April, This is the first time that loss estimates have been provided so soon after the occurrence of an event of this type. AIR s severe thunderstorm modeling team analyzed early reports and estimated an expected loss of close to $600 million. This agrees well with the $700 million estimate, based on surveys of actual insurance claims, issued on May 16 by PCS. This severe thunderstorm system was unusual in that it generated a powerful F4 (borderline F5) tornado in eastern Maryland. Otherwise, losses produced by this macroevent were not unusually high. The modeled return period for a $600-$700 loss from an occurrence of a severe thunderstorm macroevent is roughly 1.6 years. The estimated long term average annual maximum occurrence loss from severe thunderstorm events is about $1.2 billion. Obtaining reliable catastrophe loss information quickly as an actual event unfolds has become increasingly important for insurers, reinsurers, and investors. Companies may need to respond to questions from investors about the size of their losses in the immediate aftermath of a significant event. This, coupled with the opportunities available for hedging against events in real time, makes access to timely information regarding potential catastrophe losses exceedingly valuable. AIR clients were able to model their potential losses using event scenarios prepared by AIR within days of the occurrence. More than 50 client companies logged in to the ALERT website and downloaded event sets for further analysis AIR Worldwide Corporation SPECIAL REPORT 6

8 VI. About AIR Worldwide AIR Worldwide (AIR) pioneered the development and application of catastrophe loss estimation technology a technology that provided companies, for the first time, valuable tools to assess and manage their catastrophe risk. Today, AIR provides clients with a full suite of integrated products for underwriting, pricing, portfolio management, risk transfer and financing. AIR has developed models to estimate potential catastrophe losses from all major natural hazards, including hurricanes, earthquakes, extratropical cyclones, tornadoes, hailstorms and flood, for more than 35 countries throughout North and South America, the Caribbean, Europe and the Pacific Rim. AIR is also a leading provider of weather risk management services. In response to the increasing demand for accurate weather and climate information for evaluating new weather risk management opportunities, AIR provides weather data and climate forecasts for the weather risk management market around the world. AIR has created a broad range of software solutions to serve the diverse needs of our clients, among them, CLASIC/2, CATRADER, and CATMAP /2. Web-based applications include ALERT, AIRWeather ClimateCast and AIRProfiler. To find out more about AIR products and services, please visit our website at For more details on how your company can take advantage of this leading edge technology, please contact: AIR Worldwide Corporation 101 Huntington Avenue Boston, MA AIR Worldwide Corporation SPECIAL REPORT 7

The AIR Severe Thunderstorm Model for the United States

The AIR Severe Thunderstorm Model for the United States In 2011, six severe thunderstorms generated insured losses of over USD 1 billion each. Total losses from 24 separate outbreaks that year exceeded