1. © 2005 Accurate Environmental Forecasting Climate and Hurricane Risk Dr. Dail Rowe Accurate Environmental Forecasting www.accufore.com

2. © 2005 Accurate Environmental Forecasting The Team This presentation is based on the work of a team of scientists at Accurate Environmental Foresting, Inc. and Climatek, Inc: –AEF Dr. Michael Dickinson Dr. Dail Rowe –Climatek Dr. James Elsner (Florida State University) Dr. Thomas Jagger

3. © 2005 Accurate Environmental Forecasting Today’s Discussion Climate changes hurricane risk. –Regional risk changes by more then 200% Climate factors influencing hurricane activity: –El Niño – Southern Oscillation (ENSO) –North Atlantic Oscillation (NAO) –Atlantic Sea-surface Temperature (SST) Scientists generally agree on overall Atlantic basin activity. Recent innovations: –Regions at risk –Hurricane intensity –Translation from hazard to insured loss –Forecasting

4. © 2005 Accurate Environmental Forecasting El-Niño / Southern Oscillation (ENSO) El Niño (warm event) La Niño (cold event) Sea surface temperature patterns in the eastern tropical Pacific Ocean change global weather patterns.

5. © 2005 Accurate Environmental Forecasting ENSO Modulates Vertical Wind-shear http://hurricanes.noaa.gov Hurricanes derive their power by transporting water vapor from the ocean surface up a natural chimney to the upper atmosphere. Their strength relies on the existence of this chimney structure.

6. © 2005 Accurate Environmental Forecasting ENSO Modulates Vertical Wind-shear http://hurricanes.noaa.gov Weak wind-shear is conducive to hurricane development. La Niña = weak shear and more hurricanes

7. © 2005 Accurate Environmental Forecasting ENSO Modulates Vertical Wind-shear http://hurricanes.noaa.gov Strong wind-shear disrupts hurricane structure. El Niño = strong shear and fewer hurricanes

8. © 2005 Accurate Environmental Forecasting North Atlantic Oscillation (NAO) High NAO Low NAO NAO determines the strength of the atmospheric circulation in the Atlantic basin and is calculated as the difference in sea level pressures between Reykjavik, Iceland and Gibraltar. Hurricanes that form in these conditions are more likely to travel westward towards the southern US.

9. © 2005 Accurate Environmental Forecasting Atlantic Sea Surface Temperature Warmer ocean surface temperatures promote hurricane growth and development.

10. © 2005 Accurate Environmental Forecasting SST leads to decadal variability Detrended May-June average SST anomalies There is a clear multi-decadal signal in Atlantic Sea Surface Temperatures. Casual analysis of the hurricane record shows a clear link between SST and hurricane activity.

11. © 2005 Accurate Environmental Forecasting SST impact on hurricanes Major hurricanes tracks from 1951-1998 stratified by SST Cool Atlantic SSTWarm Atlantic SST

12. © 2005 Accurate Environmental Forecasting Cold vs. Warm SST Regimes Major Hurricanes U.S. Landfalls Florida Landfalls Cold: 1900 - 1925: 32 8 2 Cold: 1970 - 1994: 38 9 2 1.4 / yr 1 / 3 yrs 1 / 12.5 yrs Warm: 1926 - 1969: 115 23 12 2.6 / yrs 1 / 1.3 yrs 1 / 2.1 yrs Warm: 1995 - 2004: 38 6 4 3.8 / yrs 1 / 1.7 yrs 1 / 2.5 yrs

13. © 2005 Accurate Environmental Forecasting Modeling of Climate Factors and Hurricane Activity We employ a statistical modeling approach as in Elsner and Jagger (2004) and Elsner and Bossak (2005) to relate climate factors and hurricane activity. –Based on 130 year climate and hurricane records The Hurricane Climate Risk Index is a regional measure of the climate-conditioned annual hurricane probability relative to the averaged probability. Probability in Climate of Interest Average Probability Index =

14. © 2005 Accurate Environmental Forecasting Consensus and Innovation Most agree on projections of overall Atlantic Basin hurricane activity for the upcoming season. Innovations are occurring –Regions at risk –Storm intensity –Forecasting –Translation from hazard to insured loss IntensityAEFNOAATSRCSUAverage Named Storms13.212-1513.9159.9 All Hurricanes7.57-97.886.0 Major Hurricanes3.73-53.642.6

15. © 2005 Accurate Environmental Forecasting Hurricane Index: 1938 Climate SST NAO ENSO ENSO Trend Factors: 0.21 0.31 -0.65 -0.23 Category 3-5 HurricanesCategory 1-5 Hurricanes

16. © 2005 Accurate Environmental Forecasting Hurricane Index: 1989 Category 3-5 Hurricanes Climate SST NAO ENSO ENSO Trend Factors: 0.08 0.32 -0.73 0.36

17. © 2005 Accurate Environmental Forecasting Hurricane Index: 1994 Category 3-5 Hurricanes Climate SST NAO ENSO ENSO Trend Factors: -0.11 0.78 0.33 0.31

18. © 2005 Accurate Environmental Forecasting Hurricane Index: 2004 2004 was moderately risky for hurricanes in general, but… All hurricanes SST: 0.31 NAO: -0.51 ENSO: 0.24 ENSO Trend: 0.58

19. © 2005 Accurate Environmental Forecasting Hurricane Index: 2004 2004 was moderately risky for hurricanes in general, but… it was VERY risky for extreme events in the southeast US. All hurricanes Cat 4-5 hurricanes Cat 3.5-5 hurricanes SST: 0.31 NAO: -0.51 ENSO: 0.24 ENSO Trend: 0.58

20. © 2005 Accurate Environmental Forecasting Climate Forecasts ENSO and Atlantic SST forecasts have useful skill at lead times of at least 9 months. –Good Florida to Maine risk forecasts well in advance of the hurricane season. Forecasts of summer NAO conditions are less skillful. –Forecasts of Gulf of Mexico activity improve just prior to the hurricane season.

21. © 2005 Accurate Environmental Forecasting Insured Loss and Climate The climate induced changes in hurricane frequency and severity indicated by the Index can be used to modify the frequency and severity assumptions governing the creation of the synthetic events sets commonly used to probabilistically evaluate hurricane related insured risk. AIR and AEF have recently integrated our Index technology with AIR’s hurricane catalog to produce forecasts of how climate variability will affect the probability of insured loss during the upcoming hurricane season.

22. © 2005 Accurate Environmental Forecasting Insured Loss and Climate Damage Assessment Synthetic Hurricane Event Set Insured Loss Estimation

23. © 2005 Accurate Environmental Forecasting Insured Loss and Climate Damage Assessment Synthetic Hurricane Event Set Insured Loss Estimation 18 39

24. © 2005 Accurate Environmental Forecasting Insured Loss and Climate Damage Assessment Synthetic Hurricane Event Set Insured Loss Estimation 18 39 Climate induced changes in Loss Exceedance Curves

25. © 2005 Accurate Environmental Forecasting Conclusions Climate variability modifies both the frequency and severity of hurricanes on a regional basis. –Regional changes of more then 200% –El Niño, the North Atlantic Oscillation, and Atlantic sea-surface temperature are all important factors The AEF/AIR Climate Conditioned Hurricane Catalog permits users to evaluate the effect of climate variability on their hurricane related exposure.