Hurricane Risk Assessment
Hurricane Risk Assessment
www.elsevier.com/locate/ress
Abstract
This paper presents results from a study to evaluate long-term hurricane risks in the Southeastern United States using event-based
simulation procedures. These risks are dened by (1) the statistical extreme wind climate, and (2) the expected insured losses from damage
to residential structures. A probabilistic hurricane event model developed by the authors is used to evaluate long-term risks. The event model
parameters were derived from a statistical analysis of storms affecting the Southeastern United States and include radius of maximum winds,
central pressure difference, landfall location, storm track, and decay rate. The 50-year mean recurrence interval (MRI) gradient-level and
surface gust wind speeds are evaluated for the region investigated using results from the simulation analysis. When coupled with a damage
model, also developed by the authors, the results from the event-based simulation analysis are used to provide estimates of the expected
losses. The states of North Carolina, South Carolina, and Florida are used to demonstrate the applicability of this procedure for evaluating
expected losses. Implications for setting design wind speeds as well as risk-consistent insurance rates are discussed. q 2001 Elsevier Science
Ltd. All rights reserved.
Keywords: Damage model; Hurricane; Insured losses; Probability; Risk assessment; Simulation; Statistics; Wind speeds
United States. The occurrence of a hurricane is modeled as a To overcome these problems, Georgiou's model was modi-
Poisson process while the change in translational speed of a ed by Huang [10] to be able to better predict wind speeds.
hurricane over land is modeled as a Markov process. The Specically, a modication factor was applied to model's
results from the analysis are used to determine 50-year mean estimate of the gradient wind speed. The modication factor
recurrence interval (MRI) gradient-level wind speeds for the is a function of the central pressure difference (DP), the
region being investigated. The surface wind speeds can then radius of maximum wind speed (Rm), and the translation
be determined using appropriate gradient-to-surface conver- wind speed (Vt), as well as the relative distance to the hurri-
sion factors. Using a damage model, also developed by the cane center r=Rm : Surface wind speeds were then obtained
authors, the expected loss, dened as a percentage of the by reducing the gradient wind speed in a manner appropriate
total insured portfolio, can then be estimated. This damage for the terrain. The modied Georgiou's model was used in
model was developed using actual insurance loss (claim) the event-based simulation analysis in this study. Further
data from Hurricanes Hugo and Andrew. When coupled details of this model may be found elsewhere [1,10].
with the damage model, the results from the event-based Once a hurricane makes landfall, the energy balance
simulation analysis are used to provide estimates of the between the heat source and frictional dissipation is
expected losses. These can be presented on a 50-year disturbed due to the reduced availability of heat and
basis or on an annualized basis. While the former increased frictional dissipation. This results in a rise in
corresponds to a typical building design life, the latter atmospheric pressure in the storm's center, and conse-
may be of greater interest to the insurance industry. The quently, the hurricane weakens and the wind speeds
states of North Carolina, South Carolina, and Florida are decrease. The rise in the central pressure is most often used
used to demonstrate the applicability of this procedure for to model the weakening of a landfalling hurricane. Based on an
evaluating expected losses. analysis of historical hurricanes (see Ref. [10]), a decay model
having the following form was assumed
2. Wind eld model and Monte Carlo simulation Dpt Dp0 exp2at 1
A number of models have been used for hurricane wind where Dpt is the difference between the central pressure and
speed simulation and risk analysis studies [29]. The start- the atmopheric pressure at a distance beyond the effect of the
ing point for most of these models has been the gradient hurricane at time t; Dp0 ; the pressure difference when the
level wind eld. Huang [10] evaluated and compared a hurricane crossed the coast; a is the lling constant modeled
number of these models using data from Hurricanes Hugo, as a normally distributed random variable. The mean and
Fran, Bonnie, Earl, and Georges. In general, Batts' model standard deviation of the lling constant a for the three states
was found to overestimate the surface wind speeds, while investigated (North Carolina, South Carolina, and Florida) are
Georgiou's model was found to predict the surface wind shown in Table 1. This decay model is similar to that used by
speeds quite well at inland sites and at sites close to the Vickery and Twisdale [9], however their model generally
ocean when the wind was blowing from the ocean. suggests a more rapid decay rate. In this study, the correlation
However, Georgiou's model overpredicted the wind speeds between the lling rate and the intensity of the storm was not
at sites near the coast and underpredicted the gradient wind found to be statistically signicant. Further information on the
speeds in the region of most intense winds, i.e. the eye wall. decay model may be found elsewhere [10].
Table 1
Statistics of hurricane model parameters (from: Ref. [10]
North Carolina South Carolina Florida (Atlantic Coast) Florida (Gulf Coast)
Data from zip codes having similar wind conditions were time the speed reaches 30 m/s. Fig. 2 shows that above
weighted according to the total number of policies in each 35 m/s, the amount of damage increases rapidly, likely the
zip code (i.e. the wind speeds, claim ratios, and damage result of large amounts of rain entering buildings through
ratios were weighted averages). The relationship between breaches in the building envelopes. Considering the loss
the weighted claim ratio and effective surface wind speed is data shown in Figs. 1 and 2, the relationship between
shown in Fig. 1. The relationship between weighted damage claim ratio and effective mean surface wind speed follows
ratio and effective surface wind speed is shown in Fig. 2. It a double exponential form, while the relationship between
is interesting to note that these gures are essentially a the damage ratio and effective mean surface wind speed
quantication of the old Beaufort Scale, which suggested follows an exponential form. Using regression techniques,
that structural damage was likely to begin when the mean the claim ratio and damage ratio corresponding to a given
wind speed reached 20 m/s, and became widespread by surface mean wind speed x can therefore be obtained as [10]
about 30 m/s. Fig. 1 suggests that a few people will le
insurance claims in locations with mean wind speeds less
than 20 m/s, but that nearly everyone will le a claim by the FC x exp2exp20:239x 2 21:21p 100 2
and
(
FD x exp0:252x 2 5:823 x # 41:4 m=s
3
FD x 100 x . 41:4 m=s
where FC x is the expected claim ratio in percent and FD x
is the expected damage ratio in percent. Once the maximum
mean surface wind speed at the centroid of each zip code is
known (or has been estimated), the damage ratio and claim
ratio in each zip code are obtained from Eqs. (2) and (3),
respectively.
non-exceedance probability for the 50-year MRI (0.364) is Georgiou [7] reported a value of 37 m/s. Similarly, for the
indicated by the horizontal line. The gure indicates that southern tip of Florida, the 50-year MRI value was
wind speeds initially drop very rapidly with distance from 680:65 44:2 m=s; very close to the value (44 m/s)
the coast. The 50-year MRI gust wind speed is 52.9 m/s at found by Georgiou [7]. For inland areas, a gradient-to-
Folly Beach (located directly on the coast), 47.7 m/s at surface conversion factor of 0.45 was assumed [15]. The
Charleston City (10 km from the coast), and 43.2 m/s 50-year MRI mean wind speed for Columbia, SC, located
at Charleston Airport (25 km from the coast). Thereafter, about 180 km inland, was 500:45 22:5 m=s; which
the decrease is much more gradual, dropping to 41.0 m/s compares well with 22.7 m/s obtained using Georgiou's
at Shaw Air Force Base (150 km inland). A Lognormal model. To be compatible with the design wind speed deni-
distribution was found (rather than an Extreme Type I or tion (open terrain) in ASCE 7-95 [16], a uniform gradient-
Type II distribution as had been found in other studies) to to-surface conversion factor of 0.72 was used to obtain the
provide the best t to the simulated 50-year maximum wind surface gust wind speeds from the gradient wind contour
speeds for all sites considered in the Southeastern United map Fig. 3. The design wind speeds in ASCE 7-95 are
States [10]. considerably higher for coastal areas than those obtained
Wind speeds reported using different averaging times in this study. For example, the value for Charleston in
must be converted to a standard averaging time before ASCE 7-95 is 53 m/s (note that the hurricane importance
they can be compared. However, studies by Batts et al. factor of 1.05 has been taken out), while a value of
and Vickery and Twisdale [5,9] reported fastest-mile wind 600:72 43:2 m=s was found in this study. One possible
speeds and insufcient information was provided about their explanation for this difference is the assumption in ASCE 7-
assumed gust structures and mean wind proles to permit 95 of a very slow exposure transition from over-water to
accurate conversions to 3-second gusts or 10-minute mean over-land after a hurricane makes landfall. The basic design
speeds. Therefore, the results from the present study are wind speed map given in ASCE 7-95 was based on the
compared only with the results by Georgiou [7]. Since the simulation results from Refs. [5,7,9], all of which assumed
reported hourly mean wind speeds at different mileposts in a very gradual transition from over-water to over-land
Georgiou's study are values over water, a gradient-to- exposure. For example, Georgiou assumed the over-water
surface conversion factor of 0.65 [15] was used to estimate to over-land transition zone extended 50 km inland. In fact,
the 50-year MRI mean wind speed at various coastal this transition has been shown to occur relatively quickly in
locations. This resulted in very close agreement with an actual hurricane environment [15]. Moreover, in deriving
Georgiou's results. In the present study, the 50-year MRI the 3-second design gust wind speeds in ASCE 7-95, the
mean wind speed over water near Charleston, SC was gust factors developed by Krayer and Marshall [17] were
600:65 39 m=s; while Georgiou [7] found a value of applied to the simulated wind speeds. However, these gust
36 m/s. The 50-year MRI mean wind speed over water near factors were intended to be representative values over land.
Wilmington, NC was 580:65 37:7 m=s; while Applying the over-land gust factors to over-water mean
Z. Huang et al. / Reliability Engineering and System Safety 74 (2001) 239249 245
Fig. 5. Expected annual claim ratio for each zip code in North Carolina.
wind speeds results in higher gust wind speeds. Therefore, 1891 to 1998 by Sparks and Huang [15] found the 50-year
the coastal region design wind speeds in ASCE 7-95 are MRI gust wind speed to be 43.9 m/s, very close to the value
higher than would be predicted in this study. Finally, of 580:72 41:8 m=s obtained in the present study.
ASCE 7-95 presents design wind speeds on the coast corre- Using annual maximum wind speed records, the 50-year
sponding to exposure C (open terrain) over land. However, the MRI gust wind speed for the regions not affected by hurri-
wind speeds given by Batts et al., Georgiou and Vickery and canes in South Carolina and North Carolina was found to be
Twisdale [5,7,9] for locations along the coast were represen- approximately 37 m/s and was independent of distance from
tative values over water. This may help to further explain the the coast. The 50-year MRI gust wind speed for Columbia
higher wind speeds in ASCE 7-95 than those obtained herein. based on the hurricane simulation analysis in this study was
Studies of recent hurricanes, including Hugo (1989), found to be 500:72 36 m=s: This suggests that both
Andrew (1992), Bertha (1996), Fran (1996), Bonnie hurricanes and thunderstorms contribute to the extreme
(1998), Earl (1998), and Georges (1998), have shown that wind climate in Columbia. This `transition zone' concept
the transition from an open water exposure to an open is further described in the paper by Huang et al. [14].
country exposure in an actual hurricane environment occurs
much faster than previously assumed [15]. Within 10
20 km after landfall, the gust structure and gradient-to- 5. Prediction of expected insured losses
surface ratios are almost the same as those for hurricanes
well inland. Studies of historical wind records, including The damage model described previously can be used to
sites for which more than 100 years of annual maximum determine the expected loss ratio at each zip code for a
wind speed data are available, found that for a typical single event (see Ref. [12]) or for a period of time, i.e.
coastal location such as Charleston, located about 25 km using the long-term risk model developed herein. The states
inland from the open sea, the 50-year MRI gust speed was of North Carolina, South Carolina, and Florida are used to
approximately 44 m/s [18]. This is similar to the value demonstrate the applicability of the wind eld model and
(43.2 m/s) obtained in the present study. An analysis of the damage model to the expected loss analysis. For each
annual maximum gust wind speeds in Wilmington from 50-year period, hurricanes were simulated and the
Fig. 6. Expected annual damage ratio for each zip code in North Carolina.
246 Z. Huang et al. / Reliability Engineering and System Safety 74 (2001) 239249
Fig. 7. Expected annual claim ratio for each zip code in South Carolina.
Fig. 8. Expected annual damage ratio for each zip code in South Carolina. Fig. 10. Expected annual damage ratio for each zip code in Florida.
Z. Huang et al. / Reliability Engineering and System Safety 74 (2001) 239249 247
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wind climate using event-based simulation and analysis of wind ASCE 7-95. New York: American Society of Civil Engineers, 1995.
records, Proceedings of the Eighth International Conference on Appli- [17] Krayer WR, Marshall WR. Gust factors applied to hurricane winds.
cations of Statistics and Probability 1999, Sydney, Australia. Bull Am Met Soc 1992;73:6137.
[15] Sparks PR, Huang Z. Wind speed characteristics in tropical cyclones, [18] Sparks PR, Saripalli P. The use of historical records to put modern
Proceedings of the 10th International Conference on Wind Engineer- wind storms into perspective, Proceedings of the Seventh US National
ing 1999, Copenhagen, Denmark. Conference on Wind Engineering 1993, UCLA, Los Angeles, CA.