In this slide deck, ICLR talks about the increasing challenges faced by various stakeholders -- most particularly insurers - in managing risks associated with severe weather and seismic events.Discussed is how severe weather losses are rising across Canada and around the world and what can be expected through the next decade in terms of disaster loss claims and prevention. The deck end with a discussion on ICLR's work and its efforts to help insurers and others mitigate the impact of severe weather and earthquake events.

1. Global changes and
catastrophic loss
Glenn McGillivray
Managing Director
Institute for Catastrophic Loss Reduction
November 2014

2. ICLR
Mission - reduce loss of life and property caused by severe weather and earthquakes
Created in 1997 by the insurance community to confront rising disaster losses
Multi-disciplinary research and education provides an essential foundation for ‘science to action’
30 scientists / 100+ students / 12+ universities / 350+ research papers / $50+ million in research
University of Western Ontario affiliated

3. In the media

4. ICLR board
Kathy Bardswick (Chair)
President & Chief Executive Officer, The Co-operators Group
Barbara Bellissimo
Chief Agent & Senior Vice President, State Farm Canada
Charmaine Dean
Dean of Science, Western University
Louis Gagnon
President, Service & Distribution, Intact Insurance
Andrew N. Hrymak
Dean, Professor, Chemical and Biochemical Engineering, Western University
Paul Kovacs
Executive Director, Institute for Catastrophic Loss Reduction
Sharon Ludlow
President, Aviva Insurance Company of Canada
Brian Timney
Dean of Social Science, Western University

5. Considerations
Disasters are a serious threat
Losses are rising. Why?
What can be done about it?

6. Number of cat. events 1970-2013
0
20
40
60
80
100
120
140
160
180
200
1970 1975 1980 1985 1990 1995 2000 2005 2010
Source: Swiss Re, sigma

7. Insured losses 1970-2014(1H)
0
10
20
30
40
50
60
70
80
90
100
110
120
1970 1975 1980 1985 1990 1995 2000 2005 2010
Source: Swiss Re, sigma
USD billion at 2005 prices
Minimum selection criteria:
Total losses USD 89.2 m
Or:
Insured property claims
Shipping: USD 19.3 m
Aviation: USD 38.6 m
Other: USD 48.0 m
Or:
Casualties
Dead or missing: 20
Injured: 50
Homeless: 2 000
$19 billion

8. Insured losses by peril
CLIMATE RELATED
EARTHQUAKES VOLCANOES
GEOPHYSICAL Earthquake, volcanic eruption
METEOROLOGICAL Severe weather, winter & tropical storms, hail, tornado
HYDROLOGICAL River & flash flood, storm surge, landslide
CLIMATOLOGICAL Heatwave, freeze, wildland fire, drought
TREND

9. Number of victims 1970-2013
1,000
10,000
100,000
1,000,000
1970 1975 1980 1985 1990 1995 2000 2005 2010
Natural catastrophes Man-made disasters
Left hand scale: logarithmic. Source: Swiss Re, sigma No 2/2006
Storm in
Bangladesh
Earthquake in Peru
Earthquake
Tangshan, China
Cyclone
Gorki,
Bangladesh
EQ, tsunami
Indian
Ocean

10. Global disaster damage
$0
$10
$20
$30
$40
$50
$60
1960s 1970s 1980s 1990s 2000s 2010s(TD)
Annual insurance disaster claims, billions, adjusted for inflation
20+ fold increase since
1970s!

11. Canadian catastrophes

12. Canadian catastrophes

13. World risk index

14. Canadian disaster damage
Number of events
0204060801001201401601801960s1970s1980s1990s2000sMeteorological - HydrologicalGeological

15. Canadian catastrophes
10 killed/100 evacuated/community assistance required/historically significant/community unable to recover on its own
Based on data from the Canadian Disaster Database, Public Safety Canada

16. Canadian catastrophes
Primary concern rests with flood and earthquake (the latter on the west coast and the Ottawa/Montreal corridor)
Many instances of flood, few of EQ
Though when (not if) a major earthquake strikes the west coast, damage will likely be severe
13 great earthquakes along this fault in the last 6,000 years
Five richter 7+ events in the last 130 years in southwest B.C. and northern Washington state
Seattle earthquake, February 28, 2001, R 6.8
Will happen again, just a matter of when
Are we ready?

17. EQ scenarios

18. Canadian catastrophes
Hurricanes seldom impact Canada
Usually just remnants when they do hit
Biggest concern is on the east coast
Forest fire becoming a concern as developments grow and interface with wildlands
Tornado risk also increasing due to growing development
Misc. risks such as ice storm, blizzard, hail etc.

19. Canadian cats 2009
Winter storms in eastern Canada (Feb. 2)
$25 million
Hamilton rain (July 26)
$100- to $150 million
Alberta wind etc. (August 2-3)
$500 million
Mont Laurier tornado (August 4)
$6 million
Manitoba hail etc. (August 13-15)
$50- to $75 million
Ontario tornadoes (August 20)
$50- to $100 million
Tropical storms Bill & Danny (August 23 & 29)
$10 & 25 million
Source: Aon Benfield (Canada)

20. Canadian cats 2010
Saskatchewan storms (Spring)
Leamington & Harrow tornadoes (June 6)
Midland tornado (June 23)
Calgary hailstorm (July 12)
>$400 million
Hurricane Igor (September 21)

21. Canadian cats 2011
Storms in Ontario & Quebec (March)
Storms in Ontario & Quebec (April)
Wildfire in Slave Lake, Alberta (May 15)
$700 million
Flooding in Saskatchewan, Manitoba, Quebec (Spring)
Hail, tornadoes and wind in Alberta, Man. & Sask. (July 18/19)
Tornado in Goderich (August 21)
Hurricane Irene (August 28 to 30)
Alberta windstorm (November 27)

22. Canadian cats 2012
Flooding and wind in Ontario and Quebec (May 26 to 29)
Flooding, wind and hail in Alberta (July 12)
Flooding, wind and hail in Ontario (July 23)
Hail and wind in Alberta (July 26)
Flooding, wind and hail in Alberta (August 12)

23. Canadian cats 2013
Two small events early in the year
Southern Alberta flood (June 19-21)
$1.7 billion
GTA flood (July 8-9)
$940 million
Ontario/Quebec storm (July 19)
Ontario/Quebec/Atlantic ice storm (December 22-26)
$200+ million

24. High River, Alberta, Canada
© 2013 Reuters

25. June 23, 2013
© 2013 Reuters/Andy Clark

26. Trans-Canada Highway, Alberta
© 2013 AP Photo/The Canadian Press, Jonathan Hayward

27. Calgary, Alberta, Canada
© 2013 AP Photo/The Canadian Press, Jonathan Hayward
>$1.7 billion insured damage

28. Courtesy of Kim Sturgess, WaterSMART AB, 2014
June, 1929

29. Toronto, Canada
© 2013 AP Photo/The Canadian Press, Winston Neutel

30. © 2013 AP Photo/The Canadian Press, Frank Gunn

31. © 2013 Reuters/Mark Blinch

32. © 2013 Reuters/Mark Blinch
>$850 million insured damage

33. Toronto, Ontario
$225 million
insured damage

34. 2013 high water marks
Canada’s costliest and third costliest insured loss events within two weeks of each other
Ice storm now the second costliest – took 15 years!
Two billion dollar natural catastrophes in one year – a first!
Second place event (Slave Lake) fell not one, but two notches to fourth place
5th consecutive year of billion-dollar events

35. Canadian cats 2014
Angus tornado (June 17)
>$30 million
Saskatchewan & Manitoba storms (June 28)
Ontario storms/Burlington flood (August 4)
$90 million
Alberta wind & thunderstorms (August 7 & 8)
$450 million
$652 million (first eight months)

36. Burlington, Ontario
© 2013 Reuters/Mark Blinch
$90 million
insured damage

37. Aidrie, Alberta hailstorm
$450 million
insured damage

38. Billion-dollar years
1998 – due solely to the ice storm
2005 – due greatly to the August 19 GTA rainstorm
2009 – due greatly to back-to-back windstorms in Alberta
2010 – due greatly to large hailstorm in Alberta
2011 – due greatly to Slave Lake wildfire
2012 – due greatly to one large and two smaller hailstorms in Alberta
2013 – due to the Southern Alberta flood and GTA flood
First time ever for two billion-dollar events

39. Avg. difference between loss ratios (Auto vs. personal property)
0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% 1983-19921993-20022003-2012

40. New normal
“The Institute for Catastrophic Loss Reduction (ICLR) reports that large insured losses from extreme weather appear to be ‘the new normal’ for the Canadian insurance industry, expecting that large-loss years will no longer be rarities.” Canadian Underwriter (November 6, 2012)

41. When the feds say we have a problem…
”The rising cost of natural disasters and the financial burden on Ottawa is the country’s biggest public safety risk”… Public Safety Canada, 2013/14, Report on Plans and Priorities

42. Why are losses rising?
More people and property at risk
Aging infrastructure
The climate is changing

43. Why are losses rising?
More people and property at risk
Aging infrastructure
The climate is changing

44. Global population

45. Canadian urban population

46. Residential structures
Source: ICLR, based on data from Statistics Canada

47. Motor vehicle registration

48. Increasing values in exposed areas
Ocean Drive, FL, 1926.
Ocean Drive, FL, 2000.
The number of residents in Florida increased by 70% between 1980 and 2001. In the same period, the state’s gross domestic product soared by 130%.

54. Why are losses rising?
More people and property at risk
Aging infrastructure
The climate is changing

55. Infrastructure spending
Source: ICLR, based on data from Statistics Canada

56. Aging infrastructure
Source: Federation of Canadian Municipalities

58. Why are losses rising?
More people and property at risk
Aging infrastructure
The climate is changing

59. Global Warming, 1884 – 2011
Difference from 1951 – 1980 Average
- 2° C
+ 2° C
0°
Source: NASA Goddard Space Flight Center Scientific Visualization Studio

60. TELLING THE WEATHER STORY | 60
0
100,000
200,000
300,000
400,000
Years Before Present
Temperature Variation (°C)
NOW
400K YEARS AGO
ICE AGES
WARM PERIODS
Global Temp
+ 1°
-(5-7°)
0
STUDYING THE HISTORY TELLS US:
•Warming since last Ice Age was about 5-7oC over 10,000 years;
•Projected global warming over the next 100 years is 2-4oC;
•The rate of warming will be about 50 times faster.
HOW BIG A CHANGE IS 3-5°C OVER 100 YEARS?

61. 2013 was the 37th consecutive year with a global temperature above the 20th century average

62. September 2014 was the 355th consecutive month with a global temperature above the 20th century average

63. 800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Age (years BP)
300
180
200
220
240
260
280
CO2 (ppmv)
Source: National Climatic Data Center, NOAA

64. 300
180
200
220
240
260
280
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Age (years BP)
CO2 (ppmv)
Source: National Climatic Data Center, NOAA

65. 400
320
340
360
380
300
180
200
220
240
260
280
2013 CO2 Concentration: 400
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Age (years BP)
CO2 (ppmv)
Source: National Climatic Data Center, NOAA

66. 2013 CO2 Concentration: 400
400
320
340
360
380
300
180
200
220
240
260
280
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Age (years BP)
CO2 (ppmv)
After 40 more years at the current rate of increase
Source: National Climatic Data Center, NOAA

67. More water also evaporates MORE QUICKLY from the soil, making DROUGHTS deeper and longer still
Causing Bigger, Harder Downpours, and Simultaneously—
1
2
3
4
Evaporation from the ocean into the atmosphere increases even MORE
As the air gets even warmer, it can hold
even MORE water vapor
Heavy downpours get even heavier, causing worse flooding
5
Snowpacks melt earlier in the year, leading to more spring flooding, but less water in the heat of summer
6
There are longer intervals in drought-stricken areas between downpours, making droughts EVEN WORSE
Causing Longer and Deeper DROUGHTS
© iStockphoto/Terry Morris

68. Change in annual global temperature (1880-2010)
Anomaly Relative to 1901 – 2000 Mean (°C)
1880
1900
1920
1940
1960
1980
2000
2010
Source: National Climatic Data Center, NOAA
0.75
0.5
0.25
0
-0.25
-0.5

69. Increase in heavy precipitation days
Source: Alexander, L. V., et al., “Global observed changes in daily climate extremes of temperature and precipitation,” J. Geophys. Res., 111, D05109, doi:10.1029/2005JD006290, 2006. © 2006 American Geophysical Union. Reproduced by permission of American Geophysical Union.
2
1
0
-1
-2
-3
Worldwide

70. Hotter Years Typically Have More Fires
40 Years of Western U.S. Fire and Temperatures
62°
61°
60°
59°
58°
57°
56°
1970
1980
1990
2000
2010
Average Temperature
Number of Fires
Average Spring - Summer Temperature (°F)
Fires on U.S. Forest Service Land
Data: Climate Central, “The Age of Western Wildfires,” September, 2012

71. Colorado Springs, Colorado
June 26, 2012
© 2012 AP Photo/Helen H. Richardson, The Denver Post

72. © 2012 Reuters/Rick Wilking

73. Waldo Canyon Fire, Colorado
June 27, 2012
© 2012 NBC Universal Archives

74. Black Forest, Colorado
June 12, 2013
© 2013 Reuters/Rick Wilking

75. © 2013 ABC News via AP
Black Forest Fire, Colorado
June 11, 2013

76. West Fork Complex Fire, Colorado
June 20, 2013
© 2013 Reuters/The Pike Hotshots/U.S. Forest Service

77. Yarnell Hill Fire, Arizona
June 30, 2013
19 firefighters were killed fighting the Yarnell Hill fire
© 2013 AP Photo/The Arizona Republic, Tom Story

78. Kelowna, B.C.
September 2003

79. Source: Meteorological Service of Canada, Environment Canada.
Between 1975-1995 and 2080-2100, Canadian climate change model
Projected winter temperature change

80. “The only plausible explanation for the rise in weather-related catastrophes is climate change.”
Munich Re
One of the two largest reinsurance companies in the world
September 27, 2010

81. What can be done?
Loss prevention
Risk transfer

82. Loss prevention
Structural measures
Non-structural measures
Public awareness

83. Structural measures
Dams, levees, seawalls and other engineered structures can be effective mechanisms for protecting communities
Building codes should reflect climate knowledge
Warning systems reduce injuries and fatalities

84. Structural measures - hard

85. Structural measures - hard

86. Structural measures - hard

87. Structural measures - hard

88. Structural measures - hard

89. Structural measures - hard

90. Structural measures - hard

91. Structural measures - soft

92. Structural measures - soft

93. Non-structural measures
Non-structural measures are effective means to improve the safety of how we live, study and work
Land use planning has been proven to be a powerful tool to reduce damage and injuries

94. Public awareness
Community actions are the most important and effective in promoting disaster safety -- think locally and act locally
Informed families and businesses are best able to manage nature’s hazards
Don’t be taken by surprise
Don’t wait for it, plan for it
Canadians must establish a culture of preparedness

95. Public awareness

96. Public awareness

97. Public awareness

98. Public awareness

99. Role of insurance
Pay disaster losses
Support research in climate extremes
Lobby for better disaster management
Promote better building practices
Provide incentives and disincentives
Through pricing
Through policy wordings/exclusions
Through refusal to bind coverage
But insurance is NOT mitigation, it is simply passing on the bill to someone else

100. ICLR efforts
Three main areas of concentration
Housing
Municipal governments and cities
Small business

112. Hurricane Gustav
We found one house in Houma, LA with a roof failure (city of 100,000 people). The cause of the damage was missing toenails.
The roof flew off the left house and landed on the roof of the right house, penetrating the sheathing.

113. Building codes protect homes
severe wind damage, Florida, dollars per square foot, 2004 - 2005

114. Three Little Pigs project at UWO
Now known as the The Insurance Research Lab for Better Homes

115. Institute for
Catastrophic
Loss Reduction
Test models in wind tunnel

116. The concept

117. November 14, 2005

119. Current Design
Should work well for structural tests

121. Problems with connections are the major issue for response to wind.

122. Roof-to-Wall Connections
Example of a toe-nail roof to wall connection in the house where the nail has split the wood and offers very little hold down force.
Estimates of the hold down capacity of toe-nail connections on the test house vary from 30lbf to 160lbf (based on past literature)
Every connection (roof sheathing and roof-to-wall toe-nails) in the house has been recorded to aid in the interpretation of the experimental data and to aid computational modeling.
These data will be used for the development of probabilistic failure (risk) models
A typical toe-nail roof to wall connection in the test house

123. After Dynamic Test #3
During House Construction
Crack in wood didn’t grow
Nails moved a lot!
Air gap

125. WindEEE Dome

126. Tornado wind damage surveys
Post-storm wind damage investigations
Team of UWO researchers, partially funded by ICLR, ready to go to southern Ontario tornado damage sites at a moment’s notice
Went to one event in 2007, near Mitchell, Ontario in May
Caused approx. CAD 1 million in damage
One house severely damaged, focused on it
Observe damage and measure wind throw of debris to attempt to determine wind speed
Use models and the wind tunnel at UWO
One of the most common problems found is improper attention to detail for connections, such as missed nails.

127. Bornham, Ontario, May 2007
from here
to here

128. Elie, Manitoba tornado
June 22, 2007
Canada’s first F5 tornado

129. car
‘missing’ house

130. same car
MISSING hold-downs

131. Vaughan, Ont. tornadoes
August 20, 2009
Two F-2s

132. Missing roof-to-wall connections.

133. Roof likely lifted and wall fell outwards

134. Debris impact – internal pressurization – roof failure

135. Debris impact – internal pressurization – roof failure

136. Debris impact – internal pressurization – roof failure ??
This one, we are not sure about - it could have been that the double doors blew in…

141. This air conditioner unit travelled 70m
Nothing was holding them down… except their own weight

142. Sheathing without enough fasteners … not even the shingles came off here

145. Edge nails seem to have less capacity due to pull- through

146. Goderich, Ontario tornado
August 21, 2011
F3 tornado

148. Angus, Ontario tornado
June 17, 2014
EF2 tornado

149. Designed…for safer living
“Better than building code”
First home launched at West Point, P.E.I. in November 2006
Impact-resistant windows rated for high wind pressures;
1” thick steel rods that anchor the floors together, including between the first floor to the foundation;
Steel braces securing the trusses to the framing, and braced gable ends to withstand high winds;
Special shingles designed to meet 200 km/h standards, installed using additional nails and cement;
Heavy roof sheathing designed to stay dry, fastened with ring-shank nails in a tight nailing pattern;
Water-resistant sealing around windows and doors;
Adhesive weather-resistant strips installed over every joint in the roof sheathing to protect against water intrusion; and
Special wind-resistant siding, fascia and soffits.

153. Second home launched in Sudbury, Ont. Feb. 19., 2007
Designed…for safer living

154. Third home currently under construction in Fort Erie
Designed…for safer living

155. Showcase Homes
Retrofit an existing home to make it more resilient to natural hazards which exist in a given area
May 2008, retrofitted a home in Montreal to make it more resilient to earthquake and winter storm:
Installed a diesel generator as an alternative power source
Put in surge protection on bigger-ticket electronic items
Fit the meter with a natural gas seismic shut off valve
Anchored cabinets, office equipment, and bedroom furniture to walls
Outfitted the washing machine with armoured water supply hoses
Anchored the hot water heater to the floor
Secured pictures and mirrors to the walls
Applied 3M Scotchshield safety UV film to windows
Installed carbon monoxide and smoke detectors and providing a fire extinguisher
Installed snow melt cables on roof edges and gutters to prevent the formation of ice dams
Provided a disaster preparedness kit.

157. Showcase Homes
London - tornado (2003)
Halifax - hurricane (2004)
Vancouver - earthquake (2005)
Ottawa - winter storm (2006)
Edmonton - tornado (2007)
Montreal - ice storm (2008)
Toronto - winter storm/blackout (2009)
North York - basement flooding (Aug. 19, 2009)
Jasper - wildfire (2010)
Hamilton - basement flooding (2011)
Moncton – basement flooding (2012)
Quebec – earthquake and winter storm (2013)
Burlington (2014)

158. Building code work

159. ICLR/UWO NBC/NPC submissions
2012 NBC/NPC submissions
Clarify sewer backflow protection requirement
Align wall and roof sheathing fastening requirements
Bracing to resist lateral wind loads
Clarify connection of foundation drainage to sanitary/storm
Clarification of requirements for anchoring columns and posts

160. Thank you!
gmcgillivray@iclr.org
www.iclr.org
www.basementfloodreduction.com
Twitter: @iclrinfo