The National Weather Service has
issued a hurricane warning
for all the New Jersey coastal waters,
Long Island coastal waters and New York Harbor.
[Music and hurricane siren]
[Music and mayday call]
[Music]
Most hurricanes end up going east and or north
while off the North Atlantic coast and out to sea.
Sandy was really a unique event that it turned inland
and came in directly to the New Jersey coast.
[Music]
In my years at AON,
I've been witness to many major catastrophe events,
not just in the United States, but around the world.
I'd say one that really stuck out to me the most
was probably in 2013,
the EF5 tornado that went through Moore, Oklahoma.
We did an on-the-ground damage assessment there
and it was just really, just like being on the set
of a Hollywood movie in the sense that there's
so much devastation to homes and businesses,
schools, and just walking around
and feeling the eerie calm,
but yet looking up and seeing cars up in the trees,
just really sort of a humbling experience
and it shows the true fury of Mother Nature.
[Music]
Reinsurance is insurance for insurance companies.
You might not expect that insurance companies
might need insurance themselves
for the business that they write,
but actually they do.
We are the ones that really help get America
back on its feet after a natural disaster.
Data from the NCEI is used extensively
in building tools that are widely utilized
by both the insurance and reinsurance industry.
NOAA's National Centers for Environmental Information or NCEI
provides data to insurance and reinsurance sectors
to develop catastrophe models or CAT models,
and to validate those models.
CAT models are computer-generated models
that estimate damage costs from catastrophes.
They exist for many different locations
and for many different perils like
hurricanes, tornadoes, hail storms, floods, earthquakes,
and man-made events such as terrorism
and cyberattacks.
CAT models can either calculate
the actual losses from a historical event
or the losses from future potential disasters.
The models are generated using four building blocks:
event, hazard, exposure and vulnerability, and finance.
NCEI data is used in the first two: event and hazard
which also rely on climate
and weather data to model risks.
The final CAT models provide a way for
insurers and reinsurers to estimate risk,
price their contracts
and make important business decisions.
Catastrophe models are developed for each peril.
For example, if an industry company
wants to develop a model on tropical cyclones,
they may use NCEI's data on IBTRACS,
which is the International Best Track Archive
for Climate Stewardship.
And that covers the entire globe.
If a company is developing a model
for severe convective storms,
they would use a different NCEI data product
such as the Severe Weather Data Inventory,
which is again, a historical archive
of severe weather information they can use
to develop tornado and hail tracks in their model.
NCEI's data can also be used to verify the occurrence
of severe weather events,
for example, after a hail claim,
NCEI radar and storm data can be used retrospectively
to analyze whether hail occurred at a given location,
and if so, its size.
Insurance and reinsurance companies use NCEI data
to improve their models.
They're always improving their models
with the latest science,
the latest data sets,
and the latest insights from scientists
around the world,
not just the United States.
The CAT modeling industry is becoming
more and more important within the
insurance and reinsurance industries moving forward.
There's a lot of companies like
AON's Impact Forecasting
and other model vendors that are developing
these catastrophe models to help our clients
within the insurance and reinsurance industry
get a better understanding of the risks associated
with their commercial and residential exposures.
One of the most important global weather data sets
that we use is IBTRACS,
and it's really important in the sense that it includes
all of the active tropical cyclone databases
around the world,
and it incorporates all the weather agencies
from around the world as well.
And we use that model for a validation perspective
to understand how our models are actually performing.
[Music]
After every hurricane season,
IBTRACS gets updated with the latest information
and that gets fed into our catastrophe models,
and we also use it to try to validate
the actual losses that we see on the ground,
and ultimately we are trying to learn
from these historical experiences,
and by incorporating them into our models,
we ultimately get a better understanding
of the true risk of hurricane,
particularly in areas where they have
a very low frequency of occurrence,
like the New Jersey shore with Sandy.
And we'll also be able to calibrate our models
so we can better understand the financial implications
of these events better in the future.
If NCEI data was not available
and I'd have to do my same job,
my job would be extremely more difficult.
NCEI data is invaluable to the reinsurance industry
and it would be really hard
to put a tangible price tag on it.
The data from IBTRACS is used
in catastrophe model development.
The data from storm events is used
in severe convective storm models.
Even daily weather is used
in the financial sector for trading of
weather-related risk and derivatives.
So everything that's being compiled
and maintained is the foundation
for so many transactions in the financial sector,
that without it,
we would lose literally billions of dollars
of economic activity in the United States.
[Music]
A community that gets back on its feet faster,
a family that's gets back on their feet faster
means the community gets to start to heal sooner,
and that's the real power of both
insurance and the reinsurance backing it
is that we can quickly get these
communities back on track
and get people back to their normal lives.
[Music]
[Crashing waves and sea gulls]
