Robert Muir-Wood in RMS Cat Models: From the Comments
January 9th, 2007Posted by: Roger Pielke, Jr.
[We think that Robert Muir-Wood’s comments on the Tampa Tribune article that we discussed yesterday deserve to be highlighted. Robert thanks much for participating and adding this context from RMS. -Ed.
Robert Muir-Wood
RMS
It might be useful to provide some more measured background to this story than is to be found in the Tampa Tribune.
The idea for holding an expert elicitation on hurricane activities emerged at RMS during the summer of 2005. Expert elicitations are commonplace in the earthquake community, but, this was the first time (we believe) one had been attempted among climatologists. All those invited to the Oct 2005 meeting were told in the invitation that the purpose of the meeting was ‘to predict the activity rate of hurricanes, relevant to impact and loss modeling .. over the next 3-5 years’. Four scientists agreed to attend; Jim Elsner, Mark Saunders, Kerry Emanuel and Tom Knutson. Through the meeting, and in email exchanges in the days thereafter, a consensus was achieved around expected rates of Cat1-5 and Cat3-5 storms in the Atlantic Basin and at US landfall for the period 2006-2010. This consensus does not mean that everyone walks out of the meeting having agreed an identical answer but that everyone’s view has been equally weighted in arriving at an expected activity rate.
RMS then took these findings and prepared to implement them in the RMS Hurricane Cat model. In the model Atlantic hurricanes are split into five separate populations according to the area of formation and track. The research to determine which track types were expected to show predominant increases was undertaken by Manuel Lonfat and based on his findings the ‘increment of activity’ was distributed among the track types to preserve the overall activity rate budget at landfall. There are alternative perspectives on regionalization (as emphasized by Jim Elsner), but as such a high proportion of intense hurricanes affect Florida, the Gulf and the Southeast, for the same increase in activity rates, modeled loss results in these regions are relatively insensitive to reasonable alternative regionalizations.
At the end of this process (in March 2006) a press release was issued along with a white paper describing all the work that had been undertaken – both after being checked with the four experts. Ultimately the results of the implementation of the increase in activity rates were the responsibility of RMS and we did not look to get the experts to endorse the outcome around changes in modeled losses. A scientific paper describing the whole procedure is now in process of being published in a peer reviewed journal.
In October 2006 the expert elicitation was repeated to cover the period 2007-2011. All four original experts were invited and only Jim Elsner declined, citing that he was ‘under contract’ with another modeling organisation. At the second expert elicitation there were seven climatologists, who were presented with results from twenty statistical/climatological forecast models, each being assigned 100c of probability to be assigned among the different models. The results from this exercise (in terms of expected levels of Cat1-5 and Cat 3-5 landfalling activities) were within 1-2% of the mean expected activity rates of the first expert elicitation. Again all the models, their results and the outcome of the elicitation will be published in scientific journals.
The political response to the ‘insurance crisis’ currently underway in Florida is looking for someone to blame. Cat modelers are simply the messengers relaying news concerning the significance of a period of significantly higher hurricane activity that has persisted in 9 out of the last 12 years and that climatologists, as polled at the most recent expert elicitation, expect to continue for a decade or more longer. There is a need to get journalists and politicians in Florida to focus more attention on the reasons for the increase in hurricane activity and, in particular, the role of climate change.
January 9th, 2007 at 9:55 am
Roger, I wouldn’t presume 100% agreement from you even though you highlighted this comment, so do you agree with the concluding sentence?
“There is a need to get journalists and politicians in Florida to focus more attention on the reasons for the increase in hurricane activity and, in particular, the role of climate change.”
Presumably you would feel it is completely irrelevant why hurricane activity is up, and I think your writing idicates even the fact it is up is irrelevant from a policy perspective.
January 9th, 2007 at 1:16 pm
Robert Muir-Woods states: “Cat modelers are simply the messengers relaying news concerning the significance of a period of significantly higher hurricane activity that has persisted in 9 out of the last 12 years and that climatologists, as polled at the most recent expert elicitation, expect to continue for a decade or more longer.”
LEt’s look on the NOAA data on the storms hitting the US since 1994.
2005: 6 (4 Cat3, 2 Cat1)
2004: 6 (1 Cat4, 2 Cat3, 1 Cat2, 1 Cat1)
2003: 2 (1 Cat2, 1 Cat1)
2002: 1 (1 Cat1)
2001: 0
2000: 0
1999: 3 (1 Cat3, 1 Cat2, 1Cat1)
1998: 3 (2 Cat2, 1 Cat1)
1997: 1 (1 Cat1)
1996: 2 (1 Cat3, 1 Cat2)
1995: 2 (1 Cat3, 1 Cat2)
1994: 0
26 storms in a 12 year period (2.1667 per year). 8 of those 12 years had 2 or fewer storms hit. Since historically we have averaged around 1.75 storms a year, I hardly think 2 storms a year is “significantly higher.”
Other 12 year periods that had above average numbers of storms includes:
1932-1944, 24 storms
1942-1953, 26 storms
1944-1955, 29 storms
It is interesting to note that in the five years following the 1944-1955 12 year period (29 storms, 2.41/year), only 7 storms hit (1.4/year).
January 9th, 2007 at 2:24 pm
Coby-
Thanks . . .
Clearly hurricane activity is up when we look at 1995-2006 as compared to 1970-1994. Some scientists have argued that this is a direct consequence of greenhouse gas emissions.
However, you are indeed correct. I cannot imagine why the cause of this increase would be relevant to politicians or journalists, especially since the reality is that the jury is out among the scientific community.
The is particularly the case for the reinsurance industry, in which contracts are signed for 1-year terms.
Thanks!
January 9th, 2007 at 2:52 pm
Rich:
Significantly higher hurricane activity and US landfalling hurricanes are two different animals. The proportion of total storms:US landfalling storms is not 1:1. If you are reading articles that use this type of argument to convince their readership, you may want to check their sources and read more critically.
January 9th, 2007 at 3:36 pm
Dan- Thanks for commenting. On the relationship of North Atlantic basin activity and landfalls in the NOAA historical data, see this short essay:
http://sciencepolicy.colorado.edu/prometheus/archives/author_pielke_jr_r/001035draft_paper_for_comm.html
Thanks!
January 9th, 2007 at 5:00 pm
I’ll just add that I wasn’t basing my numbers on any articles, just NOAA’s collection of historical data.
Additionally, since the topic at hand deals with insuring against US landfalling hurricanes, I don’t see why we shouldn’t look at…well, US landfalling hurricanes.
I’ll also note that picking any smaller subset of 12 years out of the data and making larger claims seems of dubious value. I noted the large number of storms in the period 1944-1955, was followed by a relative dearth of activity. I will also point out if you look at the 12 year period from 1992-2003 there were only 16 storms hitting the US (1.33/year). There is nothing in the data you could use to infer there would be 12 storms hitting the US over the next 2 years.
January 10th, 2007 at 8:28 am
There is no link between total number of hurricanes in the North-Atlantic and number of US landfalls ? Humm, let’s see.
Over the period 1970-2006, the linear correlation between the 2 time series is 0.55, p-value ~1.e-4, it is 0.50 over the period 1950-2006, p-value ~1.e-5. So about 25% of the variance in the number of US landfalls is explained by total number of hurricanes in the basin and, relating both seems relevant. Using other measures (rank correlation) also shows a significant relationship.
Details on how to relate them is up to anyone who tries to build a hurricane risk model for the US, but I don’t see on which grounds such a statistical link should be neglected in assessing today’s US hurricane risk.
January 11th, 2007 at 9:38 am
This whole issue seems odd. (or maybe I should say – what is the issue here?) From an insurance or re-insurance point of view all I would be looking for is the estimate of hurricane activity that I am most willing to bet on to plug into my damage models. This would be for the next year or two because that is what the contracts are for. I could look out a few more years if I think premiums are going to jump fast to load them, so people are only normally complaining not so they go through the roof.
If there is reasonable competition in the market, then there will be constraint on pricing so that it should – vaguely – reflect best estimates. Is RMS that powerful a player that there is little option? Otherwise other Re’s should be able to undercut and get market share.
Climate change may or may not be a major part of the risk, but I don’t think these estimates were done off climate models. I never heard of one predicting #’s of storms. So If there is contoversy about this estimate it isn’t about climate change models correct?