BMS News

Hurricane Joaquin rapidly intensified overnight and is now a Category 1 hurricane tracking west toward the Bahamas. As I wrote about yesterday, the forecast uncertainty for Joaquin is extremely high. The National Hurricane Center (NHC) has clearly communicated this uncertainty in their forecast discussions which I have quote below.

“Confidence in the details of the track forecast late in the period remains very low, since the environmental steering currents are complex and not being handled in a consistent manner by the models. Given that a wide range of outcomes is possible, it is too soon to say what impacts, if any, Joaquin will have on the United States.”

Further, the Director of the NHC tweeted:

Until models are consistently in better agreement, the direct impacts, if any, of #Joaquin on US are very uncertain. http://t.co/CrL5cUYcVV

— Dr. Rick Knabb (@NHCDirector) September 30, 2015

Although uncertainties exist, I think it is safe to warn about what the known impacts will be “IF” Joaquin approaches or makes landfall along the East Coast.

We do know that hurricane Joaquin is now located 215 miles east-northeast of the Central Bahamas and will continue to strengthen into what will likely be a major hurricane off the East Coast by Saturday. In fact, water temperatures near Joaquin are currently at all-time record warm levels and could, if all other factors align, easily support a Category 5 hurricane. In fact, a high-end Category 3 or 4 is now likely for Joaquin, which would pack sustained winds of more than 120 mph over the Bahamas. However, it should be noted that regardless of the hurricane’s strength over the Bahamas, as hurricanes move northward out of the deep tropics, climatology suggests they tend to weaken and speeds up. How much Joaquin could weaken is still unknown. Therefore it is still premature to estimate a landfall location and insured impacts along the East Coast.

Regardless of storm strength, as an East Coast hurricane, Joaquin will create large waves, and the stronger the hurricane, the larger the waves will be. In this case, a constant on shore flow will cause extensive beach erosion along the coastline and impact coast properties.

GFW wavewatch model with 45-50 foot waves off NC coast, 20 plus all the way to Long island by early Sunday AM

Depending on the final track and if Joaquin makes landfall, a large storm surge will likely accompany Joaquin. In fact, the devastating current possibility that Joaquin could track up the Chesapeake or Delaware Bays can’t be ruled out. This type of storm track has been modeled to produce devastating storm surge for these coastal bay waters, and the already high water levels from rainfall and a near super moon will not help the situation.

In addition to the torrential rainfall currently impacting much of the East Coast, some models are forecasting more rain depending on Joaquin’s forecast track. Some forecast models produce an additional 8 – 10” of rain on top of saturated ground. And with already high river levels, some major river flooding can be expected.

A foot of rain—or more—is possible across much of the East Coast this week as Hurricane Joaquin approaches.

In summary, the uncertainty in the current track forecast cannot be understated, and it is not even represented well by the official track forecast by the NHC. Unfortunately in this situation, the spread in the forecast models is far greater in size than the cone of uncertainty in the official forecast by the NHC. As the image below shows there are still several models including the very good and reliable ECMWF (not shown) that take Joaquin out to sea.  I expect by Friday we will have a much clearer picture of where Joaquin will track this weekend, and with that, insured impacts can start to be calculated.

GFS Ensemble model shows 2 distinct solution clusters for storm tracks Door #1 up the east coast. Door #2 out to sea.

As you might have noticed TS Joaquin has been named by the NHC and is currently 425 miles East Northeast of the Bahamas.

I have been saying since the start of the season the main threat this year is along the East Coast of the U.S which follows the pattern over the last several years. Joaquin is forecasted to move closer to the East Coast this week and with it is the threat of a tropical system impacting the East Coast of the U.S. Though the forecast remains very uncertain, heavy rain, coastal flooding and strong winds are possible for the Mid-Atlantic and Northeast starting Friday with upwards of 12” of rain are forecasted to fall by the end of this weekend regardless of the strength of Joaquin.

Though it’s too soon to tell exactly where the storm will head and how strong it will get by the weekend, the possibility remains that Tropical Storm Joaquin could become a weak to major hurricane just off the Eastern Seaboard on Saturday morning. Much like we saw with TS Erika earlier this year the forecast models are handling this storm poorly and there is extremely low confidence in the forecast at this given time.

Above is view of the very wide range in the model forecasts for the storm’s future track. This makes identifying a “most likely” track all the more challenging. Note the tremendous divergence of possibilities, including several models that hook this storm toward the left (west), with potential landfall anywhere from the Outer Banks to Boston. The NHC OFCL track is in the middle of the guidance.

The intensity forecast remains equally problematic. The guidance spread is shown above, which shows the official NHC OFCL intensity remains conservative at 70 mph as the storm comes within striking range of the Mid-Atlantic coastline.

But a sizable number of models do intensify this storm into a Category 1 or 2 hurricane, which the National Hurricane Center notes in their discussion. The rationale for strengthening is the potential for wind shear over the storm to decrease. Wind shear is detrimental to tropical cyclones, and if it weakens it could allow the storm to strengthen to its full potential over the warm waters which are currently at the warmest levels ever measured since weather records began in 1880.

Regardless of the forecast model of the day. The situation is ugly with a similar set up that brought Hurricane Sandy up the East Coast of the U.S in the fall of 2012 which leads me to think the probability of Joaquin impacting the East Coast of the U.S. is higher than the storm tracking out to sea. I also feel the NHC is too conservative on intensity and the NHC should adjust this upward over the next few days.

Even if Joaquin doesn’t make landfall as a hurricane or tropical storm, this meteorological setup is nearly ideal for a high-impact flood event later this week across the core of the Northeast and Mid-Atlantic. Comparing the current pattern with similar historical weather patterns, one of the leading analogs right now is Hurricane Irene in 2011, which produced catastrophic flooding in upstate New York and New England. Other matches include the merging of Tropical Storm Tammy and a subtropical depression in October 2005 and the remnants of Tropical Storm Nicole in 2010. Therefore the rainfall of the 10” – 12” in parts of East Coast states will lead to some of the worst flooding not seen in several years.

Again, there is significant uncertainty in the forecast for this storm, and we will probably continue to see the models toss and turn over the next 24 to 48 hours. Big swings in track and intensity are possible. Social media is abuzz with discussion of a big East Coast hit, but any serious discussion should be tempered at this point concerning specific model solutions. This is something to watch and monitor closely for the rest of this week as this complex forecast situation resolves.

Tropical Storm Erika continues to defy forecasts made earlier in the week. At this point in time Erika was supposed to be much further north of the island of Hispaniola and in a much better overall environment for intensification. However, Erika is currently 90 miles southeast of Santo Domingo, DominicaRepublic, in an environment that is not at all conductive to tropical cyclone development.

TS Erika NHC forecast made Tuesday afternoon showing the track error as Erika continues to defy forecasts

This further westward movement calls for drastic changes to the probabilities forecast options provided in my last update as we play another round of model roulette. In the last update I highlighted the overall uncertainties in tropical cyclone forecasting, and Erika has definitely met expectations with regard to those uncertainties.

Tropical Storm Erika continues to battle an incredibly unfavorable environment. The wind shear, which acts to tear apart tropical cyclones, is already quite strong – about 20 mph from the west – and it is forecast to increase to nearly 30 mph today. That amount of shear is hard for a well-developed storm to fend off, and Erika isn’t even well developed , which increases the overall probability of dissipation.

Erika is in a area of 20 kts shear and is moving into an areas where shear could be as high as 30 kts. Tropical storms / hurricanes don’t like areas of high shear.

If Erika manages to make it over the mountains of Hispaniola intact and fight of this high shear area, she could quickly intensify again in the extremely warm waters off the coast of Florida. In fact history would suggest a tropical storm tracking up the west coast of Florida could be quite destructive such as the 1935 Labor Day hurricane.

Here is my updated break down of Erika’s forecast options at the moment:

• Stalled hurricane in the Bahamas (0% chance) – Unlike the last update, this is now the least likely option for Erika, given its westward track.
• Hurricane landfall in south Florida (30% chance) – A category 1 hurricane near south Florida on Monday morning with the storm stalling over the state of Florida during the middle of next week.  This would caused 6-8” or rain to fall over much of the state.
• Tropical storm landfall in south Florida, but a hurricane on the Florida panhandle (35% chance) – Maintain a west-northwest heading, gradually intensifying and heading for south Florida as a tropical storm. Then tracking into the western Gulf of Mexico and becoming a hurricane along the west coast of Florida and into the Florida panhandle.
• Death in the Caribbean (35% chance) – Failure to reach the mainland U.S.; and the storm stays further south and tracks over Hispaniola, Cuba, and maybe even northern Jamaica.

Once again there are forecast uncertainties and one can’t rule out Erika playing more forecasting tricks over the weekend as this weak disorganized system tries to stay alive. Hispaniola is historically a tropical cyclone blender.  If the NHC forecast is correct with a tropical storm landfall or close encounter to Florida much of the state may well be affected by the storm’s rainfall.  The last tropical cyclone to make landfall on south Florida was tropical storm Bonnie on July 23, 2010. Before that, the previous one was tropical storm Ernesto on August 30, 2006.  So indeed named storm activity has been very sparse since the wild 2004 and 2005 seasons.

Remember that  tropical storms are still quite capable of causing flash floods and power outages, as well as coastal erosion and flooding, and the winds can throw around unsecured loose objects. Tropical cyclones can also cause insured loss, case in point tropical storm Bill impacting Texas earlier this June.

Looking ahead there are no other tropical systems that should develop in the Atlantic Ocean next week.

Since my last update on Monday at noon, Erika has formed into a tropical storm and is tracking toward the Bahamas. Erika is currently 285 miles east of the island of Antigua in the western Caribbean. Tropical storm watches and warnings are out for many of the northern Caribbean islands. However, the headliner is that for the first time in three years, Florida is under the National Hurricane Center’s (NHC) forecast track cone of uncertainty. With a Florida landfall probability of 30%, there is a very real possibility that the 10-year Florida landfalling hurricane drought could end.

However, I must remind all readers about the overall uncertainties with forecasting hurricanes more than five days in advance. The uncertainty exists for a few reasons. First, the NHC track forecast errors over the past five years are 180 miles at day 4 and 240 miles at day 5, which are represented in the NHC cone of uncertainty. Secondly, intensity errors can also be large. Finally, this season is an El Niño year, which seem to be notorious for major hurricanes that start late in their careers. Betsy in 1965, Alicia in 1972, and Andrew in 1992 all took time to develop, but each El Niño year resulted in a major hurricane.

To demonstrate how a forecast can change look at what happen 10 years ago today as Katrina was moving off the Coast of Florida. In the loop below you will notice how the NHC forecast cone of uncertainty on Auguest 26th 11 am 2005 change in just a 12 hour period. This pivotal shift in Katrina’s forecast track occurred on Aug 26, 2005 moving from a FL panhandle landfall to LA/MS.

The forecast models for Erika are currently all over the place. Many meteorologist and various media outlets may continue to play model roulette, but the fact remains that Erika’s forecasted track and intensity is uncertain. Further, as I highlighted on Monday, we have to consider Erika’s overall weather pattern in light of the fact that the peak of the hurricane season is just 15 days away. Forecasters need to consider El Nino characteristics which include tropical waves and storms that may struggle in the main development region of the Atlantic Ocean. But as these storm move closer to the U.S. coastline, they will be more likely to develop and strengthen. These factors can’t be seen in any one forecast model run.

With Erika still 1,500 miles away from Miami, tropical storm Erika is still disorganized. However, Erika has plenty of time get organized. At this time, several factors support a gradual strengthening of Erika:

1. The vertical wind shear, which can tear storms apart, is not very strong. However, until Friday, wind shear will continue to limit development. So if Erika can survive wind shear this week, as discussed in Monday’s write up, the change in the weather systems will cause shear to decrease as Erika tracks closer to the U.S.
2. Less environmental dry air is getting wrapped into the circulation, which can disrupt thunderstorm development.
3. The ocean temperatures below the storm are becoming increasingly warm.
4. The ocean heat content is increasing along the storm’s forecast track.

Lots of hurricane SST heat potential in the Bahamas, SST’s are 29-29.5 degrees Celsius. Could mean rapid intensification

Here’s how I’d break down Erika’s forecast options at the moment:

• Death in the Caribbean (5% chance)  – Failure to reach the mainland U.S.; storm stays further south and tracks over Puerto Rico, Hispaniola. But it’s looking less likely at this point.
• Weak tropical storm landfall in the Florida panhandle (15% chance) – Maintain a west-northwest heading, avoiding the Greater Antilles, and gradually intensifying and heading for south Florida as a tropical storm (then tracking into the Gulf of Mexico and becoming a hurricane along the west coast of Florida).
• Hurricane landfall in south Florida (30% chance) – A Category 1 or 2 hurricane near south Florida on Monday (as suggested by the historically accurate European model (ECMWF), along with the high-resolution U.S. Hurricane Weather Research and Forecasting (HWRF) model). The HWRF model has been especially insistent on this.
• Stalled hurricane (50%) chance. – Maybe at this time, the most likely scenario would be a hurricane tracking over the Bahamas near Florida where it will get trapped by weak atmospheric steering currents for a few days.

850mb wind and surface pressures from four dynamical models, all valid on Sunday evening. (tropicaltidbits.com)

It is important to note “impacts” of hurricane can occur many hundreds miles away from the cone of uncertainty: rain, storm surge, and strong winds could certainly occur outside of this cone.    In the next post I can start to focus in on the insured impacts.

Fun Fact:
In addition to frequent flights into Erika by hurricane hunters, a NASA Global Hawk drone was scheduled to embark on a 24-hour mission in and around the storm on Wednesday.

This is a quick tropical-storm update for the group as activity in the Atlantic Ocean heats up this week.

You might have noticed named storm Danny is no longer a threat and has been discontinued by the National Hurricane Center (NHC). Instead, it is now an open tropical wave as it approaches the southern shores of Hispaniola. However, there is a very slight chance that this open tropical wave could become better organized once again as it approaches the southern Gulf of Mexico this weekend, but this is a long shot at this point in time.

The new concern is a tropical wave that emerged off the West Coast of Africa last week. This tropic wave is currently has a 90% chance of development according the NHC and should be named storm Erika by tomorrow. The low pressure system is located about 1,250 miles east of the southern Lesser Antilles.

Why should soon to be named Erika be more of a concern than Danny?

First, this tropical wave is at a higher latitude. Danny started out at a latitude of 10.6 degrees north while this new tropical wave is at a latitude of 14.6 degrees north, which is a better location for intensification. Further, climatology indicates that this latitude is more likely to create a U.S. threating storm.

Secondly, Danny also was surrounded by dry, dusty air which limited its development in size and intensity. This new tropical wave will not have to fight as much of this dry, dusty air.

Dust and dry air as Danny was forming last week.

Dust and dry air as TD5 is trying to organize.

Notice how much less dust and dry air is around this tropical wave versus the dust and dry air around Danny last week.

Thirdly, an upper-level trough has brought a taste of fall to much of the East Coast. As the trough slowly lifts out of the East Coast this week, upper-level winds will be much more conductive to less shear in the Atlantic Ocean.

ECMWF 5 day anomaly chart which suggests cooler temperatures lower air pressure (blue area) along the East Coast of the U.S.

ECMWF next weeks (Day 5 – 10) anomaly chart which suggests warmer temperatures and higher air pressure (orange area) along the east coast of the U.S.

As you can see, next week’s forecasted weather pattern is much different than this week’s. Although there is some uncertainty in the track and intensity with any named storm forecast. Overall, next week’s weather should allow what will be Erika to track much further northwest ward toward the Bahamas as a hurricane. In fact, Erika could be a major hurricane by the time it reaches the Bahamas on August 30th given the warm sea surface temperatures near the islands. It is a bit early to determine how much of a U.S. landfalling threat Erika will be, but most storms near the Bahamas need to be watched, and this will be the case the first week of September.

0z Aug 24 HWRF model Run Erika

The HWRF model, which did a great job with the intensification of Danny late last week, This model now provides a view of my general thinking as Erika tracks towards the Bahamas.
HWRF modeled 126 hour forecasted wind speeds of soon to be Erika.

Named Storm Fred could also develop behind Erika later this week, but let’s worry about Erika first.

Updates as needed or ask if you have questions.

After the long winter much of Eastern North America experienced, it is sad to say we are rapidly approaching mid-summer. This also means we are past the climatological peak of the U.S. severe weather season, and fast approaching the peak of the Atlantic hurricane season which occurs around September 10th. To many it may seem that the severe weather season has been an active one, while the hurricane season, to this point, has been a yawner. The data suggests, however, that the complete opposite has occurred.

U.S. Severe Weather Season

In terms of local storm report counts from the Storm Prediction Center, this year’s severe weather season has been below normal. The most noteworthy events are attributed to the above normal, and sometimes record breaking, precipitation in the Central Plains and Ohio River Valley which resulted in widespread flooding. In a normal severe storm season, defining events would be attributed to hail/wind/tornado events and not large precipitation events. According to one source, the number of flood losses, or more specifically sewer backup claims, are outpacing hail claims this season.

For the 1st time, Water Damage leads Hail in Claims Opened for the 1st half of a year. Combo of sewer probs, flood & frozen pipes.

— Bryan Wood (@bryanwx) June 9, 2015

As many of us know, flood damage is often excluded under standard homeowners, renters, and business insurance policies. Due to this and the overall lack of severe weather, it is not surprising that insured losses to date are also below normal. In fact, PCS wind and thunderstorm insured losses are still falling below the 10 year average ($9.3 billion) by 53.5%. As of July 9th, $5 billion in insured losses have been reported with two outstanding wind and thunderstorm events. This season, we have yet to see a marque severe weather event causing over $1 Billion in insured loss. Comparing to previous storm seasons, one has to go back to 2005 to be this late into the severe weather season without experiencing a $1 Billion dollar insured loss event.

The severe weather outbreaks this season have been limited due to fluctuating weather patterns, resulting in below normal insured loss. A similar pattern, if it persists, should provide more episodes of severe weather, with less risk of tornadoes and a higher risk of high wind events (derechos) across northern states. This suggests that a marque severe weather event ($1 billion or larger insured loss) is unlikely as we finish out the season. Since 2001, only one marque event has occurred after July 10th which was the Phoenix hail storm in the Fall of 2010.

Atlantic Hurricane Season

Although North Atlantic hurricane activity has been quiet since Tropical Storm Bill (Texas landfall, June 16th), the development of named storms is a major weather concern for the insurance industry. This year, there has already been two named landfalling storms with Bill being the first PCS hurricane event since Sandy in 2012. To see a similar landfall activity before June 16th, one has to go back to 1871.

In terms of Accumulated Cyclone Energy (ACE) year to date, as of Monday July 6th , the basin was running 314% above normal. As we approach the peak of hurricane season, every day that passes without activity will decrease what started out to be a very above normal year statistically. As of July 10th, the North Atlantic ACE is already down to 157% above normal.

Summary of the most recent 2015 North Atlantic season forecast

All forecasts continue to point to a below normal season with many negative factors weighing in on why named storms will have a difficult time developing in the Atlantic basin. Namely,

• Lowest 12 month running average of the Atlantic Multi-decadal Oscillation since 1995. This would suggest that the presence of cold seas surface temperatures in the main development region of the Atlantic basin results in less energy for named storms.
• The developing El Nino in the Central Pacific has created some of the highest wind shear values in the Caribbean since 1979. As a result, tropical convection is not sustainable.
• The Saharan Air Layer (Dust) has been very strong so far this season and should continue to be strong into the heart of the hurricane season. This will limit tropical convection development.

Insurance Industry Action Items

Long range seasonal forecasts still call for named storm development regardless of the negative factors listed above. In fact, some forecasts call for the expected development of named storms closer to the U.S. coastline, similar to areas impacted by Tropical Storm Bill and Ana. In an El Nino year, insured losses are typically lower than average; however, it only takes one significant event to impact the industry.

The insurance industry should keep an eye on the Madden-Julian Oscillation (MJO), which is a large scale oscillation that propagates eastward across tropics of the globe. When an area of the tropics is under the influence of the MJO, it tends to enhance tropical activity. This year already, we have seen two strong MJO pulses partially trigger two different clusters of named storm development in the West and East Pacific. Carriers can track the MJO to get a better idea of when heighten activity could start to occur in the tropical Atlantic basin. The current MJO appears to be moving into the East Pacific region now, and if it sustains itself, could enhance tropical convection in the Atlantic basin toward the second half of July. This could allow the insurance market to take advantage of LiveCAT markets to protect specific programs.

The other area of concern for U.S. carriers could be Hawaii which has seen an unusual amount of hurricane activity over the past three years. Tropical Storm Flossie passed within 100 miles of the islands in 2013, and an unprecedented three hurricanes in one year passed within 200 miles of Hawaii in 2014. Statically speaking, named storms are about 3 times more likely to come within 100 miles of Hawaii in El Nino year versus in a La Nina year. Keep this in mind knowing that there is an El Nino strengthening in the Pacific.

As we approach the climatological peak, I want to provide an update on the North American severe weather season and paint a picture of what the rest of the season might yield.

Besides the latest round of severe flooding in the South Central U.S., there has not been a noteworthy severe weather event this year. Likewise, there has not been a PCS Wind and Thunderstorm Event bulletin over a billion dollars yet. 2005 is the last year a severe weather season was without a billion dollar event this late in the season (understanding that the 2015 data is still preliminary, future loss development is likely and three events yet to have estimates issued).

Overall, the loss sum of all PCS Wind and Thunderstorm Event bulletin (10) is still running 41% of what would be normally expected by this time of year. This also equates to the slowest loss start to the severe weather season since 2007.
This overall lack of severe weather also shows up in the Storm Prediction Center severe weather reports for tornadoes, wind and hail, all of which show they are trending below the 10-year average report count.

As you might have seen in the media, the South Central U.S. has seen its fair share of rain, which has now reversed the drought conditions that had persisted in the region since 2011.   Flood damage is excluded under standard  homeowners, renters and business insurance policies. Flood coverage is available as a separate policy from FEMA National Flood Insurance Program and from a few private insurers.  However, with 8.8 million households in Texas and only 600,000 flood insurance policies, which are mostly coastal I suspect,  the flood aspect is largely uninsured event outside auto insurance policies.  As the Insurance Council of Texas told A.M. Best  auto insurance losses alone are likely to exceed the Correction: The actual figure is $250m or greater (not $1bn) , there was an incorrect figure in the A.M. Best article Artemis sourced the data from.

Highly correlated with this heavy rain for this time of year would be thunderstorm activity, and this region is where the thunderstorm activity has occurred. But like overall PCS losses, Texas is still running below the 10-year loss average for this time of year with total losses running at a similar level seen over the last three years with further loss development to occur with three more PCS events.

We can speculate about why such heavy rains have impacted the south-central states. The heavy rains can be partly attributed to much warmer than normal sea surface temperatures in the Gulf of Mexico and an active southern jet stream flow from the evolving El Niño in the eastern Pacific. El Niño is a state of the El Niño Southern Oscillation, which is essentially a slowly varying oscillation of currents in the equatorial Pacific Ocean that can either direct warm waters towards the eastern Pacific (El Niño), or towards the Western Pacific (La Niña). El Niño conditions are now established, and I would expect El Niño conditions to prevail through the remainder of this summer and into the fall.  This, combined with the warm Gulf of Mexico sea surface temperatures (concern for hurricane season also), means that more wet conditions will likely be in the cards for the Southern Plains – at least through June and possibly into July with the slow drift of  storms and moisture into the Central Plains in July.

50 years ago today, the upper Midwest was devastated by an outbreak of severe weather. A similar storm today would result in what might be one of the largest-ever severe thunderstorm losses to the insurance industry. For four consecutive days in May 1965, severe weather, including 37 significant tornadoes, of which at least nine were major tornadoes, affected much of the central United States. The most devastating part of the outbreak occurred when six tornadoes swept across the western and northern portions of Minneapolis/St. Paul. Of the six tornadoes that swept the seven-county region, four were rated F4, one was rated F3, and the other produced F2 damage.

Shown is a photo of a tornado crossing to the west of the junction of highways 7 and 101 on May 6, 1965 (taken by Minnetonka resident. H. B. Milligan). It is believed that this was the tornado that touched down in Chanhassen at 6:27 p.m. and dissipated in Deephaven at 6:43 pm.

The outbreak was significant in several ways. First, it occurred just three weeks after the historic Palm Sunday tornado outbrea, which no doubt left local residents feeling a heightened sense of alarm about storms. Second, it was the first time in Minneapolis/St. Paul history that civil defense sirens, now used nation-wide, were used to warn people about severe weather. The U.S. Weather Bureau issued quick and successful warnings that were widely communicated by local radio and television stations. These significant new communication methods likely saved many lives, despite the fact that the storms killed 13 and injured 683. Finally, the tornadoes served as yet another example that helped dispel the myth that tornadoes won’t hit a city, a lake or a river.

Historical accounts have focused mostly on the tornadoes during the outbreak because of their remarkable pattern: at a single point in time three tornadoes were on the ground, and two tornadoes hit the same location just hours apart. Some of the hardest-hit cities included Chanhassen, Deephaven, Fridley, Mounds View and the Spring Lake Park suburbs, all of which have undergone tremendous growth since 1965. It is estimated that 600 homes were destroyed during the series of storms, and over a thousand more were damaged. Today, the affected suburbs have expanded from what was farmland 50 years ago, to what is now primarily residential.

The increased number of homes and the increased value of homes in Minneapolis/St. Paul suburbs also increase the potential for catastrophic damage from a similar future event. In some cities, the type of housing exposed to storm perils affects the potential loss severity. Two of the F4 tornadoes touched down in the west suburbs, and these suburbs have seen explosive growth since 1965. For example, one of the 1965 F4 tornadoes reportedly impacted 35 homes on Lotus Lake and 50 homes on Christmas Lake. This area now hosts many multi-million dollar lake homes. Home values in other nearby neighborhoods have grown significantly as well, including multi-million dollar homes that line the expansive shores of Lake Minnetonka. Fridley, Mounds View and Spring Lake Park were impacted by two F4 tornadoes that touched down just hours apart and crossed paths. Those cities may not include as many high-value homes, but the number of residential properties has grown, and now includes not only more residential properties, but high-value commercial properties as well. For example, one of the 1965 tornadoes tracked less than a mile from what is now the Medtronic world headquarters campus.

Despite the loss of life and property damage caused by the May, 1965 storms, it’s important to note that the historical data includes only limited reports of hail and damaging winds. These perils most likely also impacted the area 50 years ago, and arguably, including damage from these lesser-reported perils would increase the financial impact of the storms.

Although there are large uncertainties on exact track, width, and strength of all the tornadoes that occurred 50 years ago across the seven-county metro region, BMS Analytics digitized these historic tracks to create a deterministic scenario in an attempt to understand the potential impact of a similar storm today. The scenario suggests an insurance industry loss between $10 – $14 billion dollars. This is equivalent to a return period of 2,500 – 7,500 years according to various catastrophe models.

BMS Analytics digitized deterministic tornado scenarios with four perturbation to account for track uncertainty

Recently we have seen images of single tornadoes hitting cities like Tuscaloosa, AL; Joplin, MO; and Moore, OK and causing billions of dollars worth of insured damages ($6 Billion in total insured loss). Recalling the events of early May, 1965, is a reminder that several major tornadoes can hit a large metropolitan area such as Minneapolis/St. Paul on the same day. Although unlikely, a similar event would be extremely damaging due to the ongoing population and wealth growth described above. And if such an event occurred, it is likely a similar outbreak would have a large impact on the insurance industry.

Over the last two days, severe weather has returned to the Central Plains in the U.S. This recent outbreak was by no means historic but it has become the most active severe weather outbreak thus far in 2015, with eight tornadoes, 31 wind reports and 162 hail reports, 13 of which were reported as 2″or larger.  Given the tornado wind damage that occurred in the towns of Moore and Sand Springs, OK, it comes as no surprise that PCS issued its first Wind and Thunderstorm CAT bulletin of the year, although it is abnormally late for such an issuance, due to the lack of severe weather.  In fact, since 2000, typically the insurance industry would have experienced just over 3, nearly 4 PCS loss events with an average of $1.3B in losses by the end of the first quarter.

BMS iVision March 25 Hail Analysis

Above is a look at the BMS iVision Verisk Climate hail size swath overlaid with the various Storm Prediction Center Local Storm Reports from the March 25 severe weather outbreak over the south-central plains.

There are no official tracks or ratings of the two tornadoes that impacted the cities of Moore and Sand Springs yet – those will come later today from the Tulsa and Norman, OK National Weather Service (“NWS”) offices – but, sadly, it has been verified that the Sand Springs tornado was the first deadly storm of the season. This comes later than the 20-year average for the first killer tornado of a given season (typically, February 11), but one month earlier than that of the 2014 season, which occurred on April 25.

The tornado that hit Moore, thankfully, looks to be not nearly as devastating as the same tornadoes that hit the city in 1999 (F5), 2003(F4) and 2013(F5). It is interesting, nonetheless, because it is not only the fourth tornado to hit the same general area in the last 17 years, but it also tracked in an unusual direction.

OKC Area Tornado Track 1880 – 2013

The image above, created by the NWS office in Norman from the work of Tom Grazulis, a tornado historian, shows many tornadoes that track over the Moore/Oklahoma City area travel in a northeast direction. The tornado yesterday, however, tracks in an atypical southeast direction, as the preliminary NWS map below illustrates.

Preliminary NWS March 25 Moore, OK Tornado Track

The other thing that becomes apparent from analysis of the 156 documented tornadoes that have occurred in the Oklahoma City metro area (OKC), is this location appears to be a magnet for tornadoes – it experiences an average of just over one each year. Since weak tornadoes were not always documented prior to 1950, this number is likely well underestimated, according to NWS. In fact, Grazulis’ study confirms the OKC region has experienced 13 violent tornadoes (F/EF4 or stronger) since 1880, including the May 19, 2013 and May 20, 2013 tornadoes in Shawnee and Moore, respectively. Also through 2013, OKC experienced two or more tornadoes on the same day 26 separate times, with only three time periods since 1950 with an over two-year lapse between tornadoes.

However, OKC and Moore are not the only areas that have experienced similar tornado frequency. Statistical work from Florida State University’s Jim Elsner suggests there are many areas comparable to the size of Moore with just as many or more tornadoes occurring since 1950, as shown in the image below.

FSU Jim Elsner analysis of areas comparable to the size of Moore, OK with as many or more tornadoes than Moore since 1950.

So, as the insurance industry prepares for the severe weather season, it is already apparent that Tornado Alley is appropriately named, since there are many areas within this region that experience the same tornado frequency as Moore. But, there is still no clear reason why, in recent years, Moore keeps getting hit by tornadoes. Studies have shown the affects of urban environments can sometimes enhance rain from thunderstorms downwind of cities (and Moore is just south of OKC), but little work has been done to determine if cities actually impact tornado formation.  Future work in the insurance industry might answer these questions.

Over a decade ago, there were several claims that “snowfalls are now just a thing of the past.”  Even as recently as February of last year, The New York Times published an article titled “The End of Snow.” These commentaries predicted that snow would soon be a distant memory, and our children and grandchildren would never see it, except in photographs.  These claims may alarm people, but the data suggests otherwise, particularly along the East Coast of the United States.

One of the most common methods to examine the impact of a winter storm is NOAA’s National Climatic Data Center Regional Snowfall Index (RSI), which uses the area of snowfall, the amounts of snowfall and the number of people living in the snowfall area to quantify the societal impact of a snowstorm.  In the Northeast, the RSI is also known as the Northeast Snowfall Impact Scale (NESIS), and the values are both a raw index value and a categorical value from 0 through 5, much like the Saffir-Simpson Hurricane Scale or Fujita Tornado Scale (i.e., the more snow that falls over a large populated area, the greater the impact on a population and the larger the number.)  This data shows that, over the last decade, there has been a trend toward an increase in high-impact snowstorms along the East Coast.

Northeast Snowfall Impact Scale (NESIS) Events

The New York City metropolitan area has the largest population in the U.S., and this area has experienced five of the top 10 snowfalls on record dating back to 1869.  However, not all large East Coast snowstorms result in large insured losses.  For example, New York City’s biggest snowfall occurred on February 11 and 12 of 2006, dumping a total of 26.9 inches.  Yet this event was never declared a PCS event (insured losses over $25 million).  Long Island’s biggest snowstorm in history was the result of a Nor’easter on February 8, 2013 that dropped 33.5 inches of snow in Medford, NY, but this storm did not receive a PCS designation either.  Of the 84 documented NESIS events since 1960, 34 have been a Category 3 (Major), 4 (Crippling) or 5 (Extreme), but only 50% have resulted in PCS losses.  The extent of the losses from the latest snowstorms that have impacted the Northeast, which were preliminarily rated between a Category 2 (Significant) and 3 on the NESIS scale, have yet to be determined.  However, we do know that winter losses are a growing area of concern for the insurance industry due to the fact that, typically, the first quarter is a stable period with little catastrophe loss.

There appears to be a continued lack of understanding around winter storm losses, which is why I am speaking on the subject at the RAA Cat Risk Management Conference in Orlando, FL.  In this presentation, I will dive deeper into the topic and provide insight into the trends and hidden issues that often result when winter storm losses fall below the retention of a normal catastrophe program.  Some of these same issues might emerge due to the latest Nor’easter/blizzard of January 26 – 27, which presented cases for business interruption insurance, CBI coverage loss, and insured loss around ingress/egress and civil authority actions due to shutdowns.