The AIR Hurricane Model: AIR Atlantic Tropical Cyclone Model V14

404 Pages·2012·11.6 MB·English

The AIR Hurricane Model:

AIR Atlantic Tropical Cyclone Model V14.0.1

as Implemented in CLASIC/2™ V14.1.0

Submitted in Compliance with the
Copyright
2011 Standards of the Florida Commission
 2012 AIR Worldwide Corporation. All rights reserved.
on Hurricane Loss Projection Methodology

UNICEDE, CATMAP and CATRADER are registered trademarks of AIR Worldwide CorJpoarnatiuona. ry 2013
Copyright

© 2012 AIR Worldwide Corporation. All rights reserved.

UNICEDE, CATMAP and CATRADER are registered trademarks of AIR Worldwide
Corporation.

AIRWeather, ALERT, CLASIC/2 and CLAS are trademarks of AIR Worldwide
Corporation.

Microsoft is a registered trademark of Microsoft Corporation.

Contact information

AIR Worldwide Corporation
131 Dartmouth Street
Boston, Massachusetts 02116-7603
USA

Tel: [phone]
Fax: [phone]

2
Model Submission Checklist

Please indicate by checking below that the following has been included in your
submission documentation to the Florida Commission on Hurricane Loss Projection
Methodology.

Yes No Item
 1. Letter to the Commission
a. Refers to the Certification Forms and states that professionals having
credentials and/or experience in the areas of meteorology, engineering,

actuarial science, statistics, and computer science have reviewed the model
for compliance with the Standards
 b. States model is ready to be reviewed by the Professional Team
 c. Any caveats to the above statements noted with a complete explanation
2. Summary statement of compliance with each individual Standard and the data and

analyses required in the Disclosures and Forms
3. General description of any trade secret information the modeler intends to present

to the Professional Team
 4. Model Identification
 5. 7 Bound Copies (duplexed)
 6. Link containing:
 a. Submission text in PDF format
 b. PDF file highlightable and bookmarked by Standard, Form, and section
c. Data file names include abbreviated name of modeler, Standards year, and

Form name (when applicable)
 d. Form S-6 (if required) in PDF format
 e. Forms M-1, M-3, V-2, A-1, A-2, A-3, A-4, A-5, A-7, and A-8 in Excel format
 f. Form S-6 in ASCII format (if required)
 7. Table of Contents
8. Materials consecutively numbered from beginning to end starting with the first page

(including cover) using a single numbering system
9. All tables, graphs, and other non-text items consecutively numbered using whole

numbers
 10. All tables, graphs, and other non-text items specifically listed in Table of Contents
11. All tables, graphs, and other non-text items clearly labeled with abbreviations

defined
12. All column headings shown and repeated at the top of every subsequent page for

Forms and tables
 13. Standards, Disclosures, and Forms in italics, modeler responses in non-italics
 14. Graphs accompanied by legends and labels for all elements
 15. All units of measurement clearly identified with appropriate units used
16. Hard copy of all Forms included in submission document Appendix except Forms

V-3, A-6, and S-6

3
Explanation of “No” responses indicated above. (Attach additional pages if
needed.)

Form S6 was submitted as a requirement under the 2009 Standards. The results are unchanged.

AIR Atlantic Tropical
Cyclone Model V14.0.1
as Implemented in
CLASIC/2™ V14.1.0 January 9, 2013

Model Name Modeler Signature Date

4
Florida Commission on
Hurricane Loss Projection Methodology

Model Identification

Name of Model and Version: AIR Atlantic Tropical Cyclone
Model V14.0.1 as Implemented in
CLASIC/2™ V14.1.0

Name of Modeling Organization: AIR Worldwide Corporation

Street Address: 131 Dartmouth Street

City, State, ZIP Code: Boston, MA 02116-7603

Mailing Address, if different from above:

Contact Person: Brandie Andrews

Phone Number: [phone] Fax Number: [phone]

E-mail Address: [email protected]

Date: January 9, 2013

5
Trade Secret Information to be Presented to
the Professional Team in Connection with the
Acceptability Process

The trade secret items in addition to Form V-3 and Form A-6 will be identified by the
Professional Team during the on-site and/or additional verification reviews.

All trade secret items identified will be documented in the Professional Team report to
the Commission.

Form S-6 was submitted as a requirement under the 2009 Standards. The results
are unchanged.

6
Table of Contents
Table of Contents

Model Submission Checklist ................................................................................................................... 3
Model Identification ................................................................................................................................ 5
Trade Secret Information to be Presented to the Professional Team in Connection with the
Acceptability Process .............................................................................................................................. 6
Table of Contents .................................................................................................................................... 7
List of Figures ..................................................................................................................................... 9
List of Tables .................................................................................................................................... 12
2011 General Standards......................................................................................................................... 15
G-1: Scope of the Computer Model and Its Implementation ............................................................ 15
G-2: Qualifications of Modeling Organization Personnel and Consultants ...................................... 34
G-3: Risk Location ............................................................................................................................ 52
G-4: Independence of Model Components ....................................................................................... 54
G-5: Editorial Compliance ................................................................................................................ 55
2011 Meteorological Standards ............................................................................................................. 57
M-1: Base Hurricane Storm Set ........................................................................................................ 57
M-2: Hurricane Parameters and Characteristics ............................................................................... 59
M-3: Hurricane Probabilities ............................................................................................................ 66
M-4: Hurricane Windfield Structure ................................................................................................. 70
M-5: Landfall and Over-Land Weakening Methodologies ............................................................... 78
M-6: Logical Relationships of Hurricane Characteristics ................................................................. 81
2011 Vulnerability Standards ................................................................................................................ 82
V-1: Derivation of Vulnerability Functions ...................................................................................... 82
V-2: Derivation of Contents and Time Element Vulnerability Functions ...................................... 104
V-3: Mitigation Measures ............................................................................................................... 109
2011 Actuarial Standards .................................................................................................................... 114
A-1: Modeling Input Data ............................................................................................................... 114
A-2: Event Definition ..................................................................................................................... 121
A-3: Modeled Loss Cost and Probable Maximum Loss Considerations ........................................ 122
A-4: Policy Conditions ................................................................................................................... 126
A-5: Coverages ............................................................................................................................... 129
A-6: Loss Output ............................................................................................................................. 131
2011 Statistical Standards ................................................................................................................... 140
S-1: Modeled Results and Goodness-of-Fit .................................................................................... 140
S-2: Sensitivity Analysis for Model Output .................................................................................... 151
S-3: Uncertainty Analysis for Model Output .................................................................................. 154
S-4: County Level Aggregation ...................................................................................................... 157
S-5: Replication of Known Hurricane Losses ................................................................................. 158
S-6: Comparison of Projected Hurricane Loss Costs ...................................................................... 165
2011 Computer Standards ................................................................................................................... 167
C-1: Documentation ........................................................................................................................ 167
C-2: Requirements .......................................................................................................................... 169
C-3: Model Architecture and Component Design .......................................................................... 171
C-4: Implementation ....................................................................................................................... 172
C-5: Verification ............................................................................................................................. 178
C-6: Model Maintenance and Revision .......................................................................................... 182
Information Submitted in Compliance with the 2011 Standards of 7
the Florida Commission on Hurricane Loss Projection Methodology
© 2012 AIR Worldwide Corporation
Table of Contents
C-7: Security ................................................................................................................................... 185
Appendices .......................................................................................................................................... 187
Appendix 1: General Standards Forms ........................................................................................... 188
Appendix 2: Meteorological Standards Forms ............................................................................... 195
Appendix 3: Vulnerability Standards Forms................................................................................... 209
Appendix 4: Actuarial Standards Forms ......................................................................................... 220
Appendix 5: Statistical Standards Forms ........................................................................................ 293
Appendix 6: PIAF Form ................................................................................................................. 313
Appendix 7: Curricula Vitæ ............................................................................................................ 328
Appendix 8: Model Evaluations ..................................................................................................... 345
Appendix 9: U.S. Hurricane Model: Accounting for Secondary Risk Characteristics ................... 363
Appendix 10: Remapped ZIP Codes ............................................................................................... 401
Information Submitted in Compliance with the 2011 Standards of 8
the Florida Commission on Hurricane Loss Projection Methodology
© 2012 AIR Worldwide Corporation
Table of Contents
List of Figures
Figure 1. AIR Tropical Cyclone Model Components ........................................................................... 16
Figure 2. Storm Track Generation ......................................................................................................... 19
Figure 3. Flowchart of the AIR Model .................................................................................................. 21
Figure 4. Event Generation Percentage Impact on Average Annual Zero Deductible Statewide Loss
Costs ...................................................................................................................................................... 31
Figure 5. ZIP Code Centroid Percentage Impact on Average Annual Zero Deductible Statewide Loss
Costs ...................................................................................................................................................... 32
Figure 6. Total Percentage Impact on Average Annual Zero Deductible Statewide Loss Costs .......... 33
Figure 7. AIR Hurricane Model Workflow ........................................................................................... 48
Figure 8. Historical Hurricane Frequency by Coastal Segment, 1900–2008 ........................................ 65
Figure 9. Symmetric Gradient Wind Profile (Assuming Updated Florida Mean Values of Rmax, Cp
and Latitude) ......................................................................................................................................... 71
Figure 10 . Observed and Modeled Wind Speeds, Hurricanes Charley (2004) .................................... 74
Figure 11. Observed and Modeled Wind Speeds, Hurricanes Dennis (2005) ....................................... 75
Figure 12. Scatter Plots of Modeled vs Observed Winds for Hurricane Charley (2004), Katrina (2005)
and Wilma (2005) .................................................................................................................................. 76
Figure 13. Modeled filling as a Function of Hour After Landfall for Weak (Blue) and Strong (Red)
Hurricanes as Compared to Historical Florida Hurricanes .................................................................... 79
Figure 14. Derivation and Implementation Of AIR Vulnerability Functions ....................................... 85
Figure 15. Actual and Simulated Damage Ratios vs Wind Speed: Coverage A—Single Company,
Single Storm .......................................................................................................................................... 87
Figure 16. Actual and Simulated Damage Ratios vs Wind Speed: Coverage C—Single Company,
Single Storm .......................................................................................................................................... 87
Figure 17. Actual and Simulated Damage Ratios vs Wind Speed: Coverage D—Single Company,
Single Storm .......................................................................................................................................... 88
Figure 18. Actual and Simulated Damage Ratios vs Wind Speed: Mobile Homes—Single Company,
Single Storm .......................................................................................................................................... 88
Figure 19. Actual and Simulated Damage Ratios vs Wind Speed: Frame—Single Company, Single
Storm ..................................................................................................................................................... 89
Figure 20. Actual and Simulated Damage Ratios vs Wind Speed: Masonry—Single Company, Single
Storm ..................................................................................................................................................... 89
Figure 21. Actual and Modeled Damage Ratios vs Wind Speed, Structures & Appurtenant Structures
............................................................................................................................................................... 97
Figure 22. Actual and Modeled Damage Ratios vs Wind Speed, Contents .......................................... 98
Figure 23. Actual and Modeled Damage Ratios vs Wind Speed, Time Element .................................. 99
Figure 24. Actual and Modeled Damage Ratios vs Wind Speed, Mobile Home ................................ 100
Figure 25. Actual and Modeled Damage Ratios vs Wind Speed, Frame ............................................ 101
Figure 26. Actual and Modeled Damage Ratios vs Wind Speed, Masonry ........................................ 102
Figure 27. Relationship of Coverage C to Coverage A Loss Cost ...................................................... 104
Figure 28. Time Element Vulnerability Relationships ........................................................................ 105
Figure 29. Relationship of Coverage D to Coverage A ....................................................................... 105
Figure 30. Actual and Modeled Losses, Coverage C .......................................................................... 106
Figure 31. Actual and Modeled Losses, Coverage D .......................................................................... 107
Figure 32. Selecting Analysis Options in CLASIC/2 .......................................................................... 118
Figure 33. Exceedance Probability Curve Information Displayed in the CLASIC/2 User Interface .. 119
Figure 34. Processing Procedures for Insurer Data in CLASIC/2 ....................................................... 120
Figure 35. Probability Distribution Around the Mean Damage Ratio ................................................ 126
Information Submitted in Compliance with the 2011 Standards of 9
the Florida Commission on Hurricane Loss Projection Methodology
© 2012 AIR Worldwide Corporation
Table of Contents
Figure 36. Contents Vulnerability Relationship .................................................................................. 129
Figure 37. Historical Claims Data Workflow ...................................................................................... 134
Figure 38. Modeled Versus Observed Surface Winds for Hurricane Andrew (1992) ........................ 144
Figure 39. Snapshot of Hurricane Andrew's Footprint at Landfall (Colors). Overlaid are Observed
Wind Radii (Contours) Derived From Demaria and Hwind, Along With Station Wind Observations
(Colored Circles) ................................................................................................................................. 145
Figure 40. Hurricane Andrew's Maximum Wind Footprint (Colors) Overlaid With Station Wind .... 146
Figure 41. Historical and Modeled U.S. Annual Landfall Probability Distributions .......................... 148
Figure 42. Historical (left) and Simulated (Right) Hurricanes Landfalling in SE Florida .................. 148
Figure 43. Some Goodness-of-Fit Comparisons for a 100-Mile Florida Segment.............................. 149
Figure 44. Sample Damage Ratio Comparison ................................................................................... 150
Figure 45. Standardized Regression Coefficients vs Time at Grid Coordinates (9,0) For Category 1 152
Figure 46. Standardized Regression Coefficients vs Time at Grid Coordinates (9,0) for Category 3 152
Figure 47. Standardized Regression Coefficients vs Time at Grid Coordinates (9,0) for Category 5 153
Figure 48. Expected Percentage Reduction vs Time at Grid Coordinates (9,0) for Category 1.......... 155
Figure 49. Expected Percentage Reduction vs Time at Grid Coordinates (9,0) for Category 3.......... 155
Figure 50. Expected Percentage Reduction vs Time at Grid Coordinates (9,0) for Category 5.......... 156
Figure 51. State of Florida and Neighboring States by Region (RoA, Figure 3) ................................ 195
Figure 52. Historical Hurricane Frequency for Florida and Neighboring States by Region ............... 197
Figure 53. Maximum Winds for the Modeled Version of the Base Hurricane Storm Set for Actual
Terrain ................................................................................................................................................. 199
Figure 54. Maximum Winds for the Modeled Version of the Base Hurricane Storm Set for Open
Terrain ................................................................................................................................................. 200
Figure 55. 100-Year Return Period Maximum Winds for Actual Terrain .......................................... 201
Figure 56. 100-Year Return Period Maximum Winds for Open Terrain ............................................ 202
Figure 57. 250-Year Return Period Maximum Winds for Actual Terrain .......................................... 203
Figure 58. 250-Year Return Period Maximum Winds Open Terrain .................................................. 204
Figure 59. Box Plot and Histogram of Central Pressure vs Rmax, Florida and Neighboring States .. 207
Figure 60. Total Loss Percentages by Wind Speed ............................................................................. 211
Figure 61. Loss Costs by ZIP Code for Owners Wood Frame, Zero Deductible ................................ 220
Figure 62. Loss Costs by ZIP Code for Owners Masonry, Zero Deductible....................................... 221
Figure 63. Loss Costs by ZIP Code for Mobile Home, Zero Deductible ............................................ 222
Figure 64. Percentage of Total Personal/Commercial Losses from Hurricane Charley (2004) .......... 238
Figure 65. Percentage of Total Personal/Commercial Losses from Hurricane Frances (2004) .......... 239
Figure 66. Percentage of Total Personal/Commercial Losses from Hurricane Ivan (2004) ............... 240
Figure 67. Percentage of Total Personal/Commercial Losses from Hurricane Jeanne (2004) ............ 241
Figure 68. Percentage of Total Personal/Commercial Losses from All Storms (2004) ...................... 242
Figure 69. State of Florida by North/Central/South Regions (RoA Figure 4) .................................... 264
Figure 70. State of Florida by Coastal/Inland Counties (RoA Figure 5) ............................................. 264
Figure 71. Percentage Change in Weighted Average Loss Costs by County—Frame Owners .......... 267
Figure 72. Percentage Change in Weighted Average Loss Costs by County—Masonry Owners ...... 268
Figure 73. Percentage Change in Weighted Average Loss Costs by County—Mobile Homes .......... 269
Figure 74. Percentage Change in Weighted Average Loss Costs by County—Frame Renters .......... 270
Figure 75. Percentage Change in Weighted Average Loss Costs by County—Masonry Renters ...... 271
Figure 76. Percentage Change in Weighted Average Loss Costs by County—Frame Condos .......... 272
Figure 77. Percentage Change in Weighted Average Loss Costs by County—Masonry Condos ...... 273
Figure 78. Percentage Change in Weighted Average Loss Costs by County—Commercial Residential
............................................................................................................................................................. 274
Figure 79. Part C: Personal and Commercial Residential Loss Curve Comparison ........................... 291
Figure 80. Scatter Plot of Comparison #1 ........................................................................................... 306
Information Submitted in Compliance with the 2011 Standards of 10
the Florida Commission on Hurricane Loss Projection Methodology
© 2012 AIR Worldwide Corporation