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How DFA Can Help the Property/Casualty Industry, Part 4
Hurricanes Katrina, Rita, Wilma...
Catastrophes: Models and Reserving
Risk Measures
Reinsurer Results:
Catastrophe and Strengthening
Hurricanes: 2003 and 2004 Results, Clustering and TransitioninG
Brushfire and Fire Following Exposures
Tsunami Exposure Worldwide and U.S.
Wind and Hail: Relative Hazard Levels
Tornado and Hailstorm
Hurricane
Cat Modeling Class
Introduction to Reinsurance
Holborn Technical Seminar
Catastrophe, Injury, and Insurance
Review of Myers & Read ARIA Paper
A Perfectly Ordinary Tuesday Morning
This is Not Your Father’s Cat Model
Global Warming and Increased Catastrophes?
Reinsurer Risk Loads from Marginal Surplus Requirements, PCAS LXXVII
Reinsurance Markets
Risk Transfer Assessment
Introduction to Asset Returns and Risks
CAS Call Paper Panel
Ceded Reinsurance Issues in DFA
Catastrophe Reinsurance Simulation Game
Reinsurance by any other name
Clash Pricing
ALLOCATION OF SURPLUS FOR A MULTI-LINE INSURER
Optimization to Improve Business Performance

 

 
May 12-13, 2005
Paul Kneuer
2005 Client Technical Seminar
Page: 1 2 3 4 5

Hailstorms

Hailstones normally range from the size of a pea to that of a golf ball, but sizes larger than baseballs have occurred with the most severe storms. Hail tends to fall in swaths that may be 20-115 miles long and 5-30 miles wide. The swath is not normally a large, continuous bombardment of hail, but generally consists of a series of hail strikes that are produced by individual thunderstorm clouds traversing the same general area.

Hail strikes are typically one-half mile wide and five miles long. They may partially overlap, but often leave completely undamaged gaps between them. Hailstorms are considered formidable among the weather and climatic hazards to property and crops of the interior plains of the U.S. because they dent vehicles and structures, break windows, damage roofs and batter crops to the point that significant agricultural losses result. Serious injury and loss of human life, however, are rarely associated with hailstorms.

According to the Insurance Information Institute, property insurers pay out an average of $1.5 billion per year for hail-related losses.

Photo credit: http://www.chaseday.com/hailstones.htm

Ouch!

Iowa Hailstorm Facts...

Iowa averages 100 hail days per year; however, the vast majority of these hailstorms are insignificant.

Based on crop-hail data, 50% of the state-wide damage occurs on just the 3 most damaging days of the year.

About half of Iowa’s hail occurs prior to the emergence of summer crops with greatest crop-hail loss occurring along the Iowa-Nebraska border and the least occurring along the Iowa-Illinois border.

Overall, crop-hail losses are an average of 5 times greater in extreme western Iowa than in extreme eastern Iowa.

According to records from the National Climatic Data Center, there were 5,161 hailstorm occurrences between 1950 and 2002. Polk county was the most affected with 183 reported hailstorms. Warren, Woodbury, Clay, and Pottawattamie also had high frequency reporting over 100 hailstorms.

Historic Hail Events
Recorded Iowa Hail Events from 1950-2002

Wisconsin Hailstorm Facts...

Roughly 20% of all severe weather "events" in Wisconsin are hail events in which hailstones are at least 3/4 inch in diameter. Damaging, straight-line wind events make up about 72% of all severe weather events, while tornadoes add up to about 8%.

Any given location in Wisconsin will usually experience about 3 days with hail per year.

Serious hailstorms (with hail stones 1.5 inch or larger in diameter) are not common in Wisconsin... however, when they do strike the result is significant property damage. Rarely is a person injured or killed by large hail in Wisconsin.

The peak hail season is April through August, although hail has been reported with thunderstorms in every month of the year.

The southern half of Wisconsin tends to have the greatest number of hail events with Dane and La Cross counties leading the way. However, any Wisconsin county can have a serious hailstorm.

Wisconsin’s worst and most costly hailstorm took place on May 12, 2000 in a band of storms south of La Crosse through the Lake Winnebago area to Lake Michigan. Ten counties were pounded with hailstones 1-3 inches in diameter during the morning hours. Thirty-six people were injured and the estimated property damaged totaled $121 million.

Source: Data from http://emergencymanagement.wi.gov

Historic Hail Events
Recorded Wisconsin Hail Events from 1982-2001

 

Regional Variations

States have different levels of tornado and hailstorm activity.

Different indications: tornado count, hailstorm count, Crop experience, ISO EC loss costs; are not consistent

Historical losses within states shows variability, as well. Some is systematic.

But, how credible??

Crop Hail Rates – Corn
Relative to Overall average = 1.00

Crop Hail Rates – Soybean
Relative to Overall average = 1.00

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