Category Archives: Disaster Resilience

Disaster Preparedness, Disaster Resilience, Lightning

The Importance
of Protecting
Critical Facilities
From Lightning Strikes

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By Kelley Collins, Director of Business Development and Communications, Lightning Protection Institute

We rely on critical facilities not only in our day-to-day lives but also during emergencies and natural disasters. As defined by government agencies, such as FEMA, critical facilities include fire stations, police stations, hospitals, and emergency operation centers, among others. But here’s the question: Are these essential facilities in your community adequately protected from the destructive impact of lightning?

The Impact of Lightning on Structures

Lightning, though less publicized than other weather events, is equally destructive and must be understood so we can take preventive measures. Lightning strikes happen continuously, with approximately 100 strikes per second globally. Each strike unleashes a tremendous amount of electricity, with millions of volts and temperatures soaring higher than the surface of the sun. When a structure is struck, the surge of electricity travels through its pipes, electrical systems, and infrastructure. While lightning often causes fires, the less visible damage can be just as severe. Computers, communication devices, security systems, and other critical electronics can be rendered useless, leading to loss of data, revenue, and the ability to provide vital services.

A strike to a critical facility can prevent essential services from being available when they’re needed most.

A single lightning strike can have devastating effects on individuals, homes, businesses, and entire communities, including critical facilities. A lightning strike to a critical facility can prevent essential services, such as emergency response or medical care, from being available when they are needed most. A well-designed and properly installed lightning protection system can prevent these consequences.

Whether you are a homeowner, business owner, or part of the design and construction industry, it’s essential to understand the impact of lightning and the steps necessary to mitigate the risk. The Lightning Protection Institute has started to advocate for stronger regulations for critical facilities, particularly in high-risk areas where the potential for lightning strikes is greater.

The Need for Regulatory Requirements

Despite the constant threat of lightning, regulatory requirements for lightning protection systems in critical facilities remain minimal. A historical look at other life safety actions could give us the foundation to protect critical facilities from lightning, which we know can create fires.

When looking to safeguard individuals and buildings from fire, fire alarms and sprinkler systems have been implemented. Fire alarms alert individuals of smoke and/or fire to ensure that they exit the building. Sprinkler systems were designed to minimize the spread of a fire and damage to the structure. Depending on states, either or both, fire alarms and sprinkler systems are required in commercial properties and/or homes.

Just as fire alarms and sprinkler systems are mandated to prevent building destruction and protect lives, lightning protection systems should be required for the same reasons. Lightning protection systems protect both lives and structures.

There are government documents that outline what is considered a critical facility and what structures are encompassed in our critical infrastructure. In addition, these federal agencies clearly see the need for higher standards in critical facilities and critical infrastructures due to their guidelines for protecting against potential flooding. Yet, there is not a mandate to protect either facilities or infrastructure from lightning strikes. 

Lightning: Second Only to Floods

Lightning is the second most damaging natural hazard after floods, impacting both individuals and communities. The same level of consideration given to flood prevention should apply to mitigating the risks of lightning. Installing lightning protection systems in critical facilities ensures these buildings remain operational during and after a strike, safeguarding the community.

Introducing regulatory requirements for lightning protection in high-risk areas would ensure that critical facilities continue to function during emergencies, providing vital services when they are needed most.

Conclusion: Lightning Deserves Our Attention

With the potential for destruction that lightning carries, it deserves as much attention as hurricanes, floods, and fires, which often dominate the headlines. We’ve taken significant steps to prepare for and protect against these natural disasters through regulations and personal actions.

The design and construction industries continue to innovate with new materials and techniques to increase the safety of individuals and communities when building new structures. Fire alarms and earthquake-resistant buildings are now standard safety measures, and hurricane-resilient homes are being built with new designs. These advancements result from collaboration across industries.

The next collaboration should be the initiative to protect communities from the impact of a lightning strike. This initiative involves implementing regulatory measures for lightning protection systems to safeguard critical facilities. Lightning protection systems intercept a lightning strike and safely disperse the energy along the conductors to ground. When properly installed by certified lightning protection contractors, these systems are scientifically proven to mitigate risks for homes, businesses, and critical facilities and infrastructure.

Several industries have the opportunity to provide their insight and expertise to protect communities: Architects, Engineers, Insurance Providers, Risk Assessors, Weather Researchers, Local Governments as well as Lightning Protection Professionals. As experts in various fields, we can protect our communities by raising awareness of lightning risks and advocating for the installation of certified lightning protection systems.

The next time you pass by a fire station, police station, or hospital in your community, take a moment to look up. Is there a lightning protection system installed? It’s critical to ensure these essential facilities are protected, especially in high-risk areas, so they can continue serving individuals and communities during and after a storm.

Learn More:

Lightning-Related Claims Up Sharply in 2023

Assess, Measure, Mitigate Your Lightning Risk

Lightning: Quantifying a Complex, Costly Peril to Support Resilience

Beyond Fire: Triple-I Interview Unravels Lightning-Risk Complexity

Lightning Sparks More Than $1 Billion in Homeowners Claims Over Five Years

Catastrophes, Coastal Property, Disaster Resilience, Floods, Homeowners Insurance

Resilience Investments Paid Off in Florida
During Hurricane Milton

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By Lewis Nibbelin, Contributing Writer, Triple-I

Babcock Ranch – a small community in southwestern Florida dubbed “The Hometown of Tomorrow” – made headlines for sheltering thousands of evacuees and never losing power during Hurricane Milton, which devastated numerous neighboring cities and left more than three million people without power.

Hunters Point, a subdivision on Florida’s Gulf Coast, remained similarly unscathed during both Hurricanes Helene and Milton. Though the development is only two years old, it’s already been through four major hurricanes. Its homes were designed with an elevation high enough to avoid severe flooding and materials that make them as sturdy as possible in high winds. When the power goes out, each home turns to its own solar panels and battery system.

For residents of both communities, this news comes as no surprise; their flood-resistant infrastructure and solar panel power systems have helped them survive several storms and hurricanes with only minor damages, demonstrating the utility of disaster resilience planning.

Such planning is expensive to implement. Homes in either community can run for over a million dollars. But, as the combined costs of Hurricanes Helene and Milton rise to the tens of billions, it’s hard to overstate the long-term benefits. Every dollar invested in disaster resilience could save 13 in property damage, remediation, and economic impact costs, suggesting risk mitigation and recovery strategies will become even more essential as natural catastrophe severity increases.

Incentivizing investment

The National Flood Insurance Program (NFIP) Community Rating System (CRS) – a voluntary program that rewards homeowners with reduced premiums when their communities invest in floodplain management practices that exceed NFIP minimum standards – aims to encourage resilience. Class 1 is the program’s highest rating, qualifying residents for a 45 percent reduction in their premiums. Of the nearly 23,000 participating NFIP communities, only 1,500 participate in the CRS. Of those 1,500, only two – Tulsa, Okla., and Roseville, Calif. – have achieved the highest rating.

High ratings are difficult to secure and maintain. Homeowners in Lee County, which borders Babcock Ranch, nearly lost their discounts earlier this year due to improper post-Hurricane Ian monitoring and documentation within flood hazard areas.

Discounts in lower-rated jurisdictions, however, still equate to large premium reductions. Miami-Dade County, Fla., for instance, earned a Class 3 rating after extensive stormwater infrastructure upgrades, saving the community an estimated $12 million annually. Residents sustained minimized flooding from Hurricane Milton under these improvements, further justifying their cost.

Local mitigation efforts offer targeted resilience solutions and resources to alleviate community risks. The insurance industry-funded Strengthen Alabama Homes provides homeowners grants to retrofit their houses along voluntary standards for constructing buildings resistant to severe weather. Completed retrofits reduce post-disaster claims and qualify grantees for substantial insurance premium discounts, prompting flood-prone Louisiana to replicate the program.

Other nature-based planning exploits local flora as a source of natural hazard protection. Previous studies support conserving natural wetlands and mangroves to impede the rate and flow of flooding, leading many communities – including Babcock Ranch, which is 90 percent wetlands – to invest in green infrastructure. Reforestation and wetland restoration projects undertaken by the Milwaukee Metropolitan Sewerage District (MMSD) also promise to store or capture millions of gallons of storm and flood water, enabling risk management alongside improved quality of life for citizens.

Most resilience projects are impossible to fund or operate without stakeholder partnerships and advanced data and analytics. Insurers, who have long assessed and measured catastrophe risk utilizing cutting-edge data tools, are uniquely positioned to confront these evolving risks and present a framework for successful preemptive mitigation.

Learn More:

Hurricane Helene Highlights Inland Flood Protection Gap

Removing Incentives for Development From High-Risk Areas Boosts Flood Resilience

Executive Exchange: Using Advanced Tools to Drill Into Flood Risk

Accurately Writing Flood Coverage Hinges on Diverse Data Sources

Legal Reforms Boost Florida Insurance Market; Premium Relief Will Require More Time

Lee County, Fla., Towns Could Lose NFIP Flood Insurance Discounts

Coastal New Jersey Town Regains Class 3 NFIP Rating

Catastrophes, Disaster Preparedness, Disaster Resilience

Hail: The “Death by 1,000 Paper Cuts” Peril

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By Lewis Nibbelin, Contributing Writer, Triple-I

Earlier this year, baseball-sized hailstones in Denver totaled vehicles and pummeled homes and businesses during the second-costliest hailstorm in Colorado history, equating to billions in damages. Melon-sized stones hit Texas the same month, downing power lines and requiring snow plows to reopen roads.

Hail – a sub-peril of severe convective storms (SCS), which also include thunderstorms with lightning, tornadoes, and straight-line winds – is among the most destructive natural catastrophes in the United States, behind as much as 80 percent of SCS claims in any one year. Yet hailstorms remain ill-monitored and highly unpredictable due to a lack of public and industry attention.

“These are death-by-1000-paper-cut perils,” explained Triple-I’s Non-Resident Scholar Dr. Victor Gensini, meteorology professor at Northern Illinois University and leading expert in convective storm research, in an interview for the All Eyes on Research podcast. “In general, we’re seeing hail on 200 out of 365 days of the year.”

While individual SCS events generating losses on the multi-billion-dollar scale of Hurricane Andrew or Katrina don’t happen, over the course of a given year the losses add up quickly.

SCS, which are rising in frequency and severity – accounted for 70 percent of insured losses globally the first half of 2024, at a billion-dollar sum 87 percent higher than the previous decade average. And in 2023, U.S. insured SCS-caused losses exceeded $50 billion for the first time on record for a single year, propelled by thousands of major hailstorms impacting more than 23 million homes.

Gensini – who was motivated to study atmospheric science after a tornado impacted his high school – shifted his focus away from tornadoes “because hail is way more common across the United States every year, and it has a much larger socioeconomic impact – whether you’re talking about agricultural losses…or just rooftop damage to your asphalt shingles,” he told host and Triple-I Economic Research Analyst Marina Madsen.

“When you take a step back and look at the thunderstorm perils producing the greatest number of insured losses, it’s hail.”

Urbanization and inflation drive these losses, as more people populate disaster-prone areas and the value of their assets and the costs to repair them have increased. The expanding presence of solar farms, spread throughout flat, originally uninhabited plains, are especially susceptible to SCS damage, with one 2019 hailstorm causing $70 million in damages to a solar energy project in Texas.

Another explanation for greater hail-related losses is our warming climate. A Climate and Atmospheric Science study led by Gensini projects that, while higher temperatures will melt more hailstorms overall, increasingly large hailstones will become more common. Stronger updrafts fueled by higher temperatures can suspend stones in the air for longer, spurring further growth.

Such trends do not bode well for insurance premium rates, but upcoming research efforts promise actionable insight into hailstorm detection and prediction. The In-situ Collaborative Experiment for the Collection of Hail in the Plains – or ICECHIP – will send Gensini and several other researchers into the Great Plains to chase and collect granular data from hailstorms next year. Backed by the National Science Foundation with more than $11 million in funding, the field study aims to reduce hail risk through improved hailstorm forecasting, enabling residents to better protect themselves and their belongings before a hailstorm touches down.

A newer initiative – the Center for Interdisciplinary Research on Convective Storms, or CIRCS – is a prospective academic industry consortium to develop multidisciplinary research on SCS risk, fostering resilience and recovery strategies informed by diverse stakeholder partnerships.

“As you can imagine, the greatest interest right now in our research is in the insurance and reinsurance verticals,” Gensini said. “Hopefully, as we continue to build relationships…the [CIRCS] center will serve as a hub for information and knowledge creation for industry members. It’s a really unique consortium and a lot of potential lines of business could benefit from it.”

Listen to Podcast: Spotify, Audible, Apple

Catastrophes, Disaster Preparedness, Disaster Resilience, Flood Insurance

Hurricane Helene Highlights Inland
Flood Protection Gap

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By Lewis Nibbelin, Contributing Writer, Triple-I

Spanning over 500 miles of the southeastern United States, Hurricane Helene’s path of destruction has drawn public attention to inland flood risk and the need for improved resilience planning and insurance purchase (“take up”) to confront the protection gap.

Extreme rainfall and wind inflicted a combination of catastrophic flooding, landslides, and extreme rainfall and wind gusts dumped an unparalleled 40 trillion gallons of water across Florida, Georgia, North Carolina, South Carolina, Virginia, and Tennessee, causing hundreds of deaths and billions in insured losses.

Most losses are concentrated in western North Carolina, with much of Buncombe County – home to Asheville and its historic arts district – left virtually unrecognizable. Torrential rain and mountain runoff submerged Asheville under nearly 25 feet of water as rivers swelled, while neighboring communities were similarly flattened or swept away.

Rebuilding will take years, especially as widespread lack of flood insurance forces most victims to seek federal grants and loans for assistance, slowing recovery. Compounding these challenges, misinformation about assistance from the Federal Emergency Management Agency (FEMA) has impeded aid operations in certain areas, leading FEMA to issue a fact sheet clarifying the reality on the ground.

A persistent protection gap

Less than 1 percent of residents in Buncombe County had federal flood insurance as Helene struck, as illustrated in the map below, which is based on National Flood Insurance Program (NFIP) take-up rate data. Inland flooding isn’t new, and neither is the inland flood-protection gap.

In August 2021, the National Weather Service issued its first-ever flash-flood warning for New York City as remnants of Hurricane Ida brought rains that flooded subway lines and streets in New York and New Jersey. More than 40 people were killed in those states and Pennsylvania as basement apartments suddenly filled with water.

Then, in July 2023, a series of intense thunderstorms resulted in heavy rainfall, deadly flash floods, and severe river flooding in eastern Kentucky and central Appalachia, with hourly rainfall rates exceeding four inches over the course of several days. Subsequent flooding led to 39 fatalities and federal disaster-area declarations for 13 eastern Kentucky counties. According to FEMA, only a few dozen federal flood insurance policies were in effect in the affected areas before the recent storm. 

“We’ve seen some pretty significant changes in the impact of flooding from hurricanes, very far inland,”  Keith Wolfe, Swiss Re’s president for U.S. property and casualty, told Triple-I CEO Sean Kevelighan in a Triple-I Executive Exchange. “Hurricanes have just behaved very differently in the past five years, once they come on shore, from what we’ve seen in the past 20.”

Need for education and awareness

Low inland take-up rates largely reflect consumer misunderstandings about flood insurance. Though approximately 90 percent of all U.S. natural disasters involve flooding, many homeowners are unaware that a standard homeowners policy doesn’t  cover flood damage. Similarly, many believe flood coverage is unnecessary unless their mortgage lenders require it.  It also is not uncommon for homeowners to drop flood insurance coverage once their mortgage is paid off to save money.

More than half of all homeowners with flood insurance are covered by NFIP, which is part of the FEMA and was created in 1968 – a time when few private insurers were willing to write flood coverage.

In recent years, insurers have grown more comfortable taking on flood risk, thanks in large part to improved data and analytics capabilities. This increased interest in flood among private insurers offers hope for improved affordability of coverage at a time when NFIP’s  Risk Rating 2.0 reforms have driven up flood insurance premium rates for higher-risk property owners.  

New tools and techniques

New tools – such as parametric insurance and community-based catastrophe insurance – also offer ways of improving flood resilience. Unlike traditional indemnity insurance, parametric structures cover risks without the complications of sending adjusters to assess damage after an event. Instead of paying for damage that has occurred, it pays out if certain agreed-upon conditions are met – for example, a specific wind speed or earthquake magnitude in a particular area. If coverage is triggered, a payment is made, regardless of damage.

Speed of payment and reduced administration costs can ease the burden on both insurers and policyholders. Alone, or as part of a package including indemnity coverage, parametric insurance can provide liquidity that businesses and communities need for post-catastrophe resilience.

While localized insurance approaches can support flood resilience, coordinated investments in public education and preemptive mitigation are crucial to reducing risk and making insurance more available and affordable. Intergovernmental collaboration with insurers on development zoning and building codes, for instance, can promote the creation of safer and climate-adaptive infrastructure, lowering human and economic losses.

Learn More:

Removing Incentives for Development From High-Risk Areas Boosts Flood Resilience

Miami-Dade, Fla., Sees Flood Insurance Rate Cuts, Thanks to Resilience Investment

Attacking the Risk Crisis: Roadmap to Investment in Flood Resilience

Catastrophes, Coastal Property, Disaster Preparedness, Disaster Resilience, Flood Insurance, Floods, Homeowners Insurance

Florida Insurers
Can Weather Another
Big Storm This Season

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Despite warnings from two leading insurance rating agencies that Hurricane Milton weakened or threatened Florida’s recovering home insurance market, the market “can manage losses” from the Category 4 storm “and are ready to cover yet another hurricane,” if one should come this season, according to industry experts who spoke with the South Florida Sun Sentinel.

AM Best and Fitch Ratings each issued reports last week warning that Milton could stretch liquidity of Florida-based residential insurers that are primarily focused on protecting in-state homeowners. But experts closer to Florida’s insurance industry cast doubt on those assertions. One reason is the two companies don’t rate most of the domestic Florida insurers whose financial strength they question, the Sun Sentinel reported.

While cautioning that loss estimates haven’t been released yet from catastrophe modelers, Florida market experts said the state’s insurers have sufficient reinsurance capital to weather not only hurricanes Debby, Helene, and Milton but another Milton-sized storm if one emerges during the latter portion of the 2024 Atlantic season.

Karen Clark, president of catastrophe modeler Karen Clark & Co., told the Sun Sentinel, “Florida insurers and the reinsurers that protect them use sophisticated tools to understand the probabilities of hurricane losses of different sizes.”

Joe Petrelli, president of Demotech – the only rating firm that reviews the financial health of most Florida-based property insurers – said insurers can purchase additional reinsurance capacity if they use up what they purchased to get them through the year.

“Carriers will have catastrophe reinsurance in place for another event, so it should not be an issue,” Petrelli told the Sun Sentinel.

“While we expect Milton to be a larger wind loss event compared to hurricanes Debby and Helene, we do not anticipate it to be near the level of insured losses caused by Hurricane Ian,” Mark Friedlander, Triple-I’s director of corporate communications said.

Ian was a Category 4 major hurricane that made landfall in Southwest Florida in September 2022 and caused an estimated $50 billion to $60 billion in private insured losses. The estimate accounted for up to $10 billion in litigated claims due to one-way attorney fees that were in effect at the time of the storm.

“The market is in its best financial condition in many years due to state legislative reforms in 2022 and 2023 that addressed the man-made factors which caused the Florida risk crisis – legal system abuse and claim fraud,” Friedlander said. “Florida residential insurers also have adequate levels of reinsurance to cover catastrophic loss events like Milton.”

Learn More:

Triple-I “State of the Risk Issues Brief”: Attacking Florida’s Property/Casualty Risk Crisis

Florida Homeowners Premium Growth Slows as Reforms Take Hold, Inflation Cools

Legal Reforms Boost Florida Insurance Market; Premium Relief Will Require More Time

It’s not too late to register for Triple-I’s Joint Industry Forum: Solutions for a New Age of Risk. Join us in Miami, Nov. 19 and 20.

Catastrophes, Coastal Property, Disaster Preparedness, Disaster Resilience, Flood Insurance

Removing Incentives
for Development From High-Risk Areas Boosts Flood Resilience

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(Photo by Jonathan Sloane/Getty Images)

By Lewis Nibbelin, Contributing Writer, Triple-I

Withdrawing federal subsidies in climate-vulnerable areas can deter development and promote disaster resilience, according to a recent Nature Climate Change study. The study found that these benefits extend beyond the targeted areas.

These findings underscore the utility of land conservation as hazard protection, as well as the critical role financial incentives play in driving – or obstructing – resilience.

A natural experiment

“Empirical research into this question is limited because few policy experiments exist where a clear comparison can be made of ‘treatment’ settings, where incentives for development have been removed, and ‘control’ settings, similar areas where such incentives remain,” the study states. “One such experiment does exist, however.”

The 1982 Coastal Barrier Resources Act (CBRA) rendered more than one million acres along U.S. coasts ineligible for various incentives, including access to flood insurance through the National Flood Insurance Program (NFIP). Though development in these high-risk areas remains legal, the CBRA shifts total responsibility onto property owners to manage that risk.

Decades later, areas under the CBRA have 83 percent fewer buildings per acre than similar non-designated areas, leading to higher development densities in less risky neighboring areas. Subsequent reductions in flood damages have generated hundreds of millions in NFIP savings per year – due not only to NFIP ineligibility in CBRA areas, but also to fewer and less costly flood claims filed in neighboring areas.

Neighboring areas benefit from the natural infrastructure provided by undeveloped wetlands, which can ease flood risk severity by impeding the rate and flow of flooding.

Housing demand a challenge

Despite the evident value of limiting development in high-risk areas, such limitations are challenging to implement during a nationwide affordable housing shortage. Navigating housing demands in tandem with a rise in natural disasters will require a coordinated effort on local, state, and federal levels.

One approach is FEMA’s Community Rating System (CRS), a voluntary program that incentivizes local floodplain management practices exceeding the NFIP’s minimum standards. Class 1 is the highest rating, qualifying residents for a 45 percent reduction in their premiums. Of the nearly 23,000 participating NFIP communities, only 1,500 participate in the CRS. Of those 1,500, only two have achieved the highest rating: Tulsa, Okla., and Roseville, Calif.

While high ratings are difficult to secure, investments in flood planning yield long-term gains via safer infrastructure and more affordable premiums, with discounts in lower-rated jurisdictions still equating to millions in savings.

CRS discounts are especially advantageous following NFIP’s Risk Rating 2.0 reforms and increased private-sector interest in flood risk. Both have contributed to a more representative and actuarially sound flood insurance market that sets rates based on property-specific risks, thereby raising the premiums of riskier property owners.

Concerns about effective climate risk mitigation strategies persist, however – especially in the wake of unprecedented destruction wrought by Hurricane Helene.

While NFIP reforms are making flood insurance more equitable, many homeowners – including many of those most impacted by Hurricane Helene – are unaware that flood coverage is not offered by a standard homeowners policy. Likewise, many believe that flood insurance is necessary only if required by their lenders, leaving inland residents more susceptible to costly flood damages.

This lack of common knowledge about insurance is not a failure of consumers – rather, it represents the insurance industry’s urgent need to provide greater outreach, public education, and stakeholder collaboration.

Incentivizing public-private collaboration has demonstrated success, so removing federal incentives from additional high-risk areas would require extensive multidisciplinary coordination to prevent inadvertently widening the insurance protection gap. Emerging approaches to risk mitigation and resilience – such as community-based catastrophe insurance, New York City’s recent parametric insurance flood pilot, and the nation’s first public wildfire catastrophe model in California – offer opportunities for fairer rates and targeted local resilience.

If paired with policies based on the CBRA, such innovations could help ensure that appropriate risk transfer occurs alongside substantial risk reduction.

Learn More:

Triple-I “State of the Risk” Issues Brief: Flood

Executive Exchange: Using Advanced Tools to Drill Into Flood Risk

Accurately Writing Flood Coverage Hinges on Diverse Data Sources

Lee County, Fla., Towns Could Lose NFIP Flood Insurance Discounts

Miami-Dade, Fla., Sees Flood-Insurance Rate Cuts, Thanks to Resilience Investment

Milwaukee District Eyes Expanding Nature-Based Flood-Mitigation Plan

Attacking the Risk Crisis: Roadmap to Investment in Flood Resilience

It’s not too late to register for Triple-I’s Joint Industry Forum: Solutions for a New Age of Risk. Join us in Miami, Nov. 19 and 20.

Catastrophes, Coastal Property, Disaster Preparedness, Disaster Resilience, Flood Insurance, Floods

CSU: Post-Helene, 2 More “Above Normal” Weeks Of Storm Activity Expected

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(Photo by Joe Raedle/Getty Images)

As work continues to address the harm inflicted by Hurricane Helene, researchers at Colorado State University (CSU) warn that the next two weeks “will be characterized by [tropical storm] activity at above normal levels.” 

The CSU researchers define “above normal” by accumulated cyclone energy (ACE) of more than 10. This level of hurricane intensity has been reached in less than one-third of two-week periods in early October since records have been kept.

Hurricane Kirk, they wrote, is “extremely likely” to generate more than 10 ACE during its lifetime in the eastern/central Atlantic. Tropical Depression 13 has just formed and is likely to generate considerable ACE in its lifetime across the Atlantic. The National Hurricane Center is monitoring an additional area for formation in the Gulf of Mexico that should be monitored for potential U.S. impacts.

“Hurricane Kirk is forecast to track northwestward across the open Atlantic over the next few days, likely becoming a powerful major hurricane in the process,” said CSU research scientist and Triple-I Non-resident Scholar Phil Klotzbach. “The system looks to generate approximately an additional 20 ACE before dissipation, effectively guaranteeing the above-normal category for the two-week period.”

With more than 160 people confirmed dead in Florida, Georgia, South Carolina, North Carolina, Virginia, and Tennessee,  Helene is now the second-deadliest hurricane to strike the mainland United States in the past 55 years, topped only by Hurricane Katrina in 2005.

Reinsurance broker Gallagher Re predicts that private insurance market losses from Helene will rise to the mid-to-high single-digit billion dollar level, higher than its pre-landfall forecast of $3 billion to $6 billion, according to Chief Science Officer and Meteorologist Steve Bowen.

As always – and with particular urgency in the wake of Helene’s devastation – Triple-I urges everyone in hurricane-prone areas to stay informed, be prepared, and follow the instructions of local authorities. We also ask that people be mindful of the potential for flood danger far inland, as reflected in the experiences of many non-coastal communities during Hurricane Ida and Helene.

Learn More:

How to Prepare for Hurricane Season

Triple-I “State of the Risk” Issues Brief: Hurricanes

Hurricanes Don’t Just Affect Coasts; Experts Say: “Get Flood Insurance”

Disaster Resilience, Flood Insurance, Floods

Executive Exchange: Using Advanced Tools
to Drill Into Flood Risk

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Analysis based on precise, granular data is key to fair, accurate insurance pricing – and is more important than ever before in an era of increased climate-related risks. In a recent Executive Exchange discussion with Triple-I CEO Sean Kevelighan, a co-founder of Norway-based 7Analytics discussed how his company’s methodology – honed by use in the oil and gas industry – can help insurers identify opportunities to profitably write flood coverage in what might seem to be “untouchable” areas.

7Analytics uses hydrology, geology, and data science to develop high-precision flood risk data tools.

“We are four oil and gas geologists behind 7Analytics,” said Jonas Torland, who also is the company’s chief commercial officer, “and between us we’ve spent 100 years chasing fluids in the very complicated subsurface.”

Torland believes his firm can bring a new level of refined expertise to U.S. insurers seeking to pinpoint pockets of insurability against flood.

“Instead of analyzing faults and carrier beds, we’re now analyzing streams and culverts and changing land-use features,” Torland told Kevelighan. “I think the approach we bring is brilliant for problems related to climate and population migration and urban pluvial flooding in particular.”

Torland said he hopes his company can help close the U.S. flood protection gap by giving private insurers the comfort levels and incentives they need to write the coverage. While more insurers have been covering flood risk in recent years, the National Flood Insurance Program (NFIP) still underwrites the lion’s share of flood risk.

NFIP’s recently reformed pricing methodology, Risk Rating 2.0 – which aims to make the government agency’s premium rates more actuarially sound and equitable by better aligning them with individual properties’ risk – has created concerns among policyholders whose premiums are rising as rates become more aligned with principles of risk-based pricing.

As the cost of participating in NFIP rises for some, it is reasonable to expect that private insurers will recognize the market opportunity and respond by applying cutting-edge data and analytics capabilities and more refined pricing techniques to seize those opportunities. This is where Torland believes 7Analytics can help, and he noted that the company had already had some positive test results in flood-prone Florida.

Kevelighan agreed that solutions like those provided by 7Analytics are what is needed to help private insurers close the flood insurance gap. Insurers are telling Triple-I as much.

“I think we can all agree that the current way we review flood risk is antiquated,” Kevelighan said. “So we’ve got to bring that new technology, that new innovation to begin changing behaviors and changing how and where we develop and how we live.”

Learn More:

Triple-I “State of the Risk” Issues Brief: Flood

Accurately Writing Flood Coverage Hinges on Diverse Data Sources

Lee County, Fla., Towns Could Lose NFIP Flood Insurance Discounts

Miami-Dade, Fla., Sees Flood-Insurance Rate Cuts, Thanks to Resilience Investment

Milwaukee District Eyes Expanding Nature-Based Flood-Mitigation Plan

Attacking the Risk Crisis: Roadmap to Investment in Flood Resilience

Catastrophes, Coastal Property, Disaster Preparedness, Disaster Resilience, Flood Insurance, Floods, Homeowners Insurance, Legal Environment, Regulation, Wildfire

Triple-I Experts Speak
on Climate Risk, Resilience

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Hurricane Beryl’s rapid escalation from a tropical storm to a Category 5 hurricane does not bode well for the 2024 Atlantic Hurricane season, which is already projected to be of above-average intensity, warns Triple-I non-resident scholar Dr. Philip Klotzbach.

“This early-season storm activity is breaking records that were set in 1933 and 2005, two of the busiest Atlantic hurricane seasons on record,” Dr. Klotzbach, a research scientist in the Department of Atmospheric Science at Colorado State University, recently told The New York Times.

The quick escalation was a result of above-average sea surface temperatures. A hurricane that intensifies faster can be more dangerous as it leaves less time for people in its path to prepare and evacuate. Last October, Hurricane Otis moved up by multiple categories in just one day before striking Acapulco, Mexico, as a Cat-5 that killed more than 50 people.

After weakening to a tropical storm, Beryl made landfall as a Cat-1 hurricane near Matagorda, Texas, around 4 a.m. on July 8, according to the National Hurricane Center, making it the first named storm in the 2024 season to make landfall in the United States.  Beryl unleashed flooding rains and winds that transformed roads into rivers and ripped through power lines and tossed trees onto homes, roads, and cars. Restoring power to millions of Texans could take days or even weeks, subjecting residents who will not have air conditioning to further risk as a sweltering heatwave settles over the state.

Extreme heat was just one climate-related topic addressed by Triple-I Chief Insurance Officer Dale Porfilio in an interview with CNBC’s “Last Call” on July 9. While most farmers are insured against crop damage due to heat conditions and homeowners insurance typically covers wildfire-related losses, Porfilio noted, a “more subtle impact is on roofs that we thought were built to a 20-year lifespan.”

When subjected to extreme heat, roofs can become more brittle and prone to damage from wind or hail.

“So, you have to think about the roof coverage on your home insurance policy,” Porfilio said.

He also pointed out that flood risk represents “one of the biggest insurance gaps in this country. Over 90 percent of homeowners do not have the coverage.”

Many people incorrectly believe homeowners insurance covers flood damage or that they don’t need the coverage if their mortgage lender does not require it.

In an interview on CNBC’s “Squawk Box,” Triple-I CEO Sean Kevelighan discussed the potential impact of the predicted “well above-average” 2024 season on the U.S. property/casualty market.

“This is what the insurance industry is prepared for,” Kevelighan said. “It keeps capital on hand after writing policies to make sure that those promises can be kept.” The P/C industry has $1.1. trillion in surplus as of March 31, 2024.

Kevelighan pointed out that the challenges to the industry go beyond climate-related trends, explaining how legal system abuse, regulatory environments, shifting populations, and inflation are impacting insurers’ loss costs.

In Florida, for example, “you’ve got over 70 percent of all homeowners insurance litigation residing in that state, whereas it represents less than 10 percent of the overall claims.”

He pointed out that Florida’s insurance market has improved – with homeowners insurance premium growth  flattening somewhat – as a result of tort reform legislation and added that Louisiana’s legislature addressed insurance reform during its most recent session.

“In California, insurers can’t catch up with inflationary costs because of regulatory constraints,” Kevelighan noted. “They are not able to model [climate risk] and are not able price reinsurance into their policies.”

California’s wildfire situation is complex, and the state’s Proposition 103 has hindered insurers’ ability to profitably write homeowners coverage in that disaster-prone state. In late September 2023, California Insurance Commissioner Ricardo Lara announced a package of executive actions aimed at addressing some of the challenges included in Proposition 103. Lara has given the department a deadline of December 2024 to have the new rules completed.

Learn More:

Florida Homeowners Premium Growth Slows as Reforms Take Hold, Inflation Cools

Lightning-Related Claims Up Sharply in 2023

Less Severe Wildfire Season Seen; But No Less Vigilance Is Required

Accurately Writing Flood Coverage Hinges on Diverse Data Sources

IRC: Homeowners Insurance Affordability Worsens Nationally, Varies Widely by State

Legal Reforms Boost Florida Insurance Market; Premium Relief Will Require More Time

2024 Wildfires Expected to Be Up From Last Year, But Still Below Average

CSU Researchers Project “Extremely Active” 2024 Hurricane Season

Triple-I Issues Brief: Hurricanes

Triple-I Issues Brief: Attacking Florida’s Property/Casualty Risk Crisis

Triple-I Issues Brief: California’s Risk Crisis

Triple-I Issues Brief: Legal System Abuse

Triple-I Issues Brief: Wildfires

Triple-I Issues Brief: Severe Convective Storms

Triple-I Issues Brief: Flood

Disaster Preparedness, Disaster Resilience, Wildfire

Less Severe Wildfire Season Seen; But No Less Vigilance Is Required

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By Max Dorfman, Research Writer, Triple-I

This wildfire season is expected to be less intense than normal, but people in high-risk areas should be aware of and prepared for potential damage, according to Craig Clements, a professor of meteorology and climate science at San José State University.

“There are days people really need to be careful,” said Dr. Clements, who directs the Wildfire Interdisciplinary Research Center and is a Triple-I non-resident scholar. “High fire days are typically hot, dry, and windy. If there’s ignition, these fires can spread quickly, depending on the fuel type.”

Despite record-breaking conflagrations across the Northern Hemisphere in recent years, U.S. wildfire frequency (number of fires) and severity (acres burned) have been declining in recent years and in 2023 were among the lowest in the past two decades.

While that trend is positive – reflecting progress in prevention of human-ignited wildfires – it isn’t a reason for complacency.  Another long-term trend has been the doubling of the share of natural catastrophe insured losses from wildfires over the past 30 years, according to Swiss Re. This reflects the impact of a growing number of people living in the wildland-urban interface – the zone of transition between unoccupied and developed land, where structures and human activity intermingle with wildland and vegetative fuels.

A 2022 study in the journal Frontiers in Human Dynamics found that people are moving to areas that are increasingly vulnerable to catastrophic wildfires.

“They’re attracted by maybe a beautiful, forested mountain landscape and lower housing costs somewhere in the wildland-urban interface,” said University of Vermont environmental scientist Mahalia Clark, the paper’s lead author. “But they’re just totally unaware that wildfire is something they should even think about.”

To prepare, people should keep an eye out on the National Weather Service, social media, or watch the news, to ensure they are ready for any potential risks, and be on the lookout for Red Flag Warning days.

Dr. Clements also recommends referring to the National Interagency Fire Center website, which is updated daily for fire risks in particular regions. Triple-I suggests looking into the Wildfire Prepared Home designation program, which helps homeowners take protective measures for their home and yard to mitigate wildfire risks.

It’s also important for homeowners to remember that, following wildfires, rains can result in landslides and debris flows that often are not covered by insurance policies. It’s especially important to understand the difference between “mudslides” and “mudflow” and to discuss your coverage with an insurance professional.

Learn more:

2024 Wildfires Expected to Be Up From Last Year, But Still Below Average

Tamping Down Wildfire Threats: How Insurers Can Mitigate Risks and Losses

Mudslides Often Follow Wildfire; Prepare, Know Insurance Implications

Triple-I “State of the Risk” Issues Brief: Wildfires: State of the Risk