The Risks of Hazard

The annual conference for the National Association of Professional Surplus Lines Offices (NAPSLO) was last week in San Diego, and Intermap’s Catherine Stinson was there. It was our first trip to NAPSLO, and it was exciting to hear from Catherine that the concerns we address with location-based analytics for underwriting are concerns of conference attendees. She caught up with several attendees, in what was a very busy couple days for all. In fact, it sounds like intense business discussions went late into the night for some.

The Associated Press recently ran a story on new research that tries to ascertain the return period (or annual likelihood) of the 2013 Colorado floods. Here is a reminder from the Denver Post of what the flood was like; since it was over two years ago (it seems like yesterday!).

As any decent summary should, let’s start with the conclusion of the research: “…the best way to characterize this storm is a very unusually widespread 100-year event with some small pockets of a 500-year event thrown in there.”

A very unusually widespread event? A 100-year event, except where it was a 500-year event?

Recently, I’ve explored in this blog the potential earthquakes in the New Madrid and Cascadia seismic zones. (By the way…little rumblings in New Madrid this week.) One of the main points of those blog posts was how underinsured the property is in those regions, where the seismic risk is possibly underappreciated. Let’s take a look at California, where everyone knows a big earthquake is going to happen; including the USGS, which suggests California has more than a 99% chance of having a magnitude 6.7 or larger earthquake within the next 30 years.

Last week I compared hurricane history with the current (at the time) forecast. There were a few storms of potential interest, including Erika and Ignacio. Well, here’s what really happened:

What? Flood models are biased?