An interesting piece of research due to be published soon aims to prove that storm surge height is not directly correlated to hurricane, or storm, wind speeds at the time of landfall, rather it is the intensity and size of the storm 18 hours prior to landfall that matters.
Researchers Hal Needham, an associate at Louisiana State University and Barry Keim, a professor and Louisiana State Climatologist, have been working on a number of papers looking at the correlation between storm surge heights and intensity or size of storms and hurricanes, according to The Advocate.
Needham and Keim are responsible for the SURGEDAT storm surge data project, which has seen them analyse and map historical storm surge impacts around the world. The new research they have been undertaking has built on this work, looking to identify the links, if any, between storm intensity and heights of storm surges.
In a number of major hurricanes the storm surges were significantly higher than could be accounted for solely on the basis of the wind speeds at landfall. For example, hurricane Katrina caused a 28 foot storm surge with Category 3 winds at landfall. Using the accepted Saffir Simpson scale of hurricane intensity measurement alone does not explain this, and many other hurricanes, outsized storm surges compared to wind speeds when they hit the coastline.
Needham and Keim have been looking at data going back to 1880, with details on 600 hurricanes and tropical storms worldwide, information sourced from newspapers other research, data from federal agencies and more than 7,500 high-water marks from the U.S.
The researchers have found that by looking at the storms intensity and size 18 hours prior to landfall a more accurate forecast of the potential storm surge height can be derived. They note that other factors such as direction, shoreline geography and depth of water all come into lay as well.
Needham and Keim believe that both a hurricane or tropical cyclones wind speed and size 18 hours before landfall will give a better forecast of the size of storm surge that they will bring to the shore.
This raises potential questions and opportunities for the catastrophe bond market. U.S. hurricane cat bonds often include coverage for damage caused by storm surge and this year we have seen the first storm surge only cat bond using a parametric trigger, MetroCat Re Ltd. . If the height of a storm surge could be forecast, with a reasonable degree of accuracy, 18 hours prior to landfall it could trigger significant secondary market trading activity of any exposed cat bonds.
Needham and Keim’s research could lead to a forecast being developed which attempts to predict the height of storm surges being brought towards the coastline by hurricanes and tropical cyclones. Cat bond investors would no doubt be fascinated to gain access to such a forecast.
Of course, if the correlation could be proved to be very strong then perhaps a trigger could even be structured, for a cat bond, reinsurance contract or derivative, which used the forecast height of a storm surge prior to landfall to actually denote whether a payout was due.
That parametric trigger, based on the 18 hours pre-landfall storm surge forecast, could actually result in a payout before any damage was caused, which would be extremely valuable to exposed corporates and insurers. Of course, this would require a great deal of evidence from the research before anyone would trust such a forecast, but perhaps one day in the future we could see such pre-disaster, forecast based triggers becoming used?
Needham and Keim note that the 18 hour pre-landfall forecast is not all that useful in disaster planning as evacuations typically need to be initiatiated 48 hours before landfall. However an 18 hour warning of a major storm surge is sure to be extremely valuable to local authorities to help them better understand the potential impact to coastal communities.
Check out the SURGEDAT database which is a fantastic resource that every reinsurer, broker and ILS specialist should be aware of.
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