1. PowerPoint Slides for Professors Spring 2010 Version PowerPoint Slides for Professors Spring 2010 Version This file as well as all other PowerPoint files for the book, “Risk Management and Insurance: Perspectives in a Global Economy” authored by Skipper and Kwon and published by Blackwell (2007), has been created solely for classes where the book is used as a text. Use or reproduction of the file for any other purposes, known or to be known, is prohibited without prior written permission by the authors. Visit the following site for updates: http://facpub.stjohns.edu/~kwonw/Blackwell.htmlhttp://facpub.stjohns.edu/~kwonw/Blackwell.html. To change the slide design/background, [View]  [Slide Master] W. Jean Kwon, Ph.D., CPCU School of Risk Management, St. John’s University 101 Murray Street New York, NY 10007, USA Phone: +1 (212) 277-5196 E-mail: Kwonw@stjohns.eduKwonw@stjohns.edu

2. Risk Management and Insurance: Perspectives in a Global Economy 5. Catastrophe Risk Assessment: Natural Hazards Click Here to Add Professor and Course Information

3. Study Points  Catastrophic events Definitions Trends  Types of natural disasters  Gee Gees (Insight 5.3) 3

4. Swiss Re Definition (2008 Reporting Period) 4

5. United Nations/Munich Re Definition 5

6. Frequency of Catastrophes (Figure 5.1) → 2008 6

7. Number of Victims 7

8. Insured Losses  Economic reasons explain much of the concentration trend.  People are drawn to areas that hold potential for greater economic prosperity, such as cities.  Personal (preference) reasons explain this concentration trend. 8 Figure 5.2 (updated)

9. Insured Natural Cats as % of Nonlife Premium 1970-2008 9

10. Types of Natural Disasters 1.Earthquakes 2.Storms 3.Floods 4.Volcanism 10

11. World Map of Natural Hazards 11 Earthquake Storm Volcanic Eruption Other Flood Source: World of Natural Hazards (2000)

12. Earthquakes  Earthquakes are caused by friction between moving tectonic plates. Earthquakes originate at fairly well-defined faults.  The Pacific Rim is especially prone to earthquake activity Ring of Fire (Figure 5.3)  Recent events 1976 Tangshan, China 2003 Iranian earthquake 2005 Kashmir, Pakistan 2008 Sichuan, China 2010 Port-au-Prince, Haiti 12

13. Deadliest Earthquakes (Selected) 13 The Great San Francisco Earthquake (1906) 3,000 people killed $524 million in damage http://www.howstuffworks.com/12-of-the-most-destructive-earthquakes.htm Sichuan, China, Earthquake (2008) 87,000 people killed/missing 4.8 million homeless www.drgeorgepc.com

14. Deadliest Earthquakes (Selected) 14 Kanto, Japan, Earthquake (1923) 143,000 people killed aboutjapan.japansociety.org Damghan, Iran Earthquake (856) 200,000 people killed web.mit.edu/4.614/www/images/thumb/1047.jpg

15. Deadliest Earthquakes (Selected) 15 Tangshan, China, Earthquake (1976) 255,000 people killed www.waidev2.com Shansi, China, Earthquake (1556) 830,000 people killed www.soilandhealth.org

16. Deadliest Earthquakes (Selected) 16 2005 Kashmir, Pakistan2010 Port-au-Prince, Haiti

17. Ring of Fire 17

18. Ring of Fire and Other 18

19. Tsunamis and Earthquakes  Tsunami Large, rapidly moving ocean waves produced by the displacement of water caused by earthquakes, landslides, volcanic eruptions or even a sufficiently large meteorite impact.  December 26, 2004, Tsunami near Indonesia 19 Source

20. Canary Islands (Insight 5.1) 20

21. Canary Islands 21

22. Storms  Generically known as “tropical storms”  Various names by region Typhoon Severe tropical cyclone Severe cyclonic storm Tropical cyclone 22

23. 23

24. Average No. of Tropical Storms and Hurricanes 24

25. US Hurricane Season 2007 25

26. Measurement of Wind Velocity Beaufort Scale Saffir-Simpson Scale 26

27. Floods  Partial or complete inundation of a normally dry land area caused by an overflow of tidal, river, or lake water or after a heavy rain 100-year flood  Flood damage can result from a single event, such as a hurricane or thunderstorm. Floods also occur due to repeated exposure to rainfall. 27 Source

28. 28 Is Your Home Safe? Is Your Home Safe?

29. Volcanism  Volcano Vents in the earth’s crust through which gases, molten rock/lava and solid fragments are discharged  Volcanic hazard assessment  Climate change and volcanism 29

30. Worst Catastrophes – Casualty (History)  Storm and flood in Bangladesh (11/14/1970) → 300,000  Earthquake [M7.5] in China (7/28/1976) → 255,000  Earthquake [M9] and tsunami in Indonesia (12/26/2004) → 220,000  Cyclone Gorky in Bangladesh (4/29/1991) → 138,000  Earthquake [M7.7] and landslide (Pakistan, India, Afghanistan) → 73,300 …  Heat wave in Europe (6/1/2003) → 35,000  Kobe, Japan, earthquake [M7.2] (1/17/1995) → 6,425 30

31. Worst Catastrophes – Cost (History)  Hurricane Katrina in the US (8/25/2005) → $68B  Hurricane Ike in the US (9/4/2008)  $25B  Hurricane Andrew in the US (8/23/1992) → $23B  Terror attacks in the US (09/11/2001) → $22B  Northridge earthquake [M6.6] in the US (1/17/1994) → $19B  Hurricane Ivan in the US (9/2/2004) → $14B …  Earthquake [M9] and tsunami in Indonesia (12/26/2004) → $2B 31

32. 32 Global Geophysical Events Gee Gees (Insight 5.3)

33. Discussion Questions 33

34. Discussion Question 1  Is your country of birth or residence immune from natural catastrophe? If not, find the records of recent natural events that caused human casualty, property damage or both. Do they meet the definition of catastrophe by an international organization or insurer? 34

35. Discussion Question 2  Discuss why tsunamis are closely related to earthquakes. 35

36. Discussion Question 3  What are the possible factors affecting the rise of natural catastrophes in modern society? Describe the factors also reflecting the environments in the region with which you are familiar (e.g., the Caribbean, northern European or South Pacific). 36

37. Discussion Question 4  Investigate the process of recovery from Hurricane Katrina (U.S.), the 2004 tsunami (Indian Ocean), the 2010 Haiti earthquake or any major natural catastrophe in recent years. Examine the scale, scope and speed of the process to estimate how long it will take to complete it. 37