Peter McKernan

So in the next 30 minutes, you guys get ready for some really exciting and interesting technical property content on severe convective storm.

So as we know, you know, these storms are, are very powerful and, and they do have potential for significant loss.

So we're going to explore, you know, the current state of some severe convective storm.

There's going to be a presentation of some available research, you know, and drawing some really interesting parallel findings that's also occurring simultaneously in some of our the personal lines business.

You know, so this is this is really cutting edge information.

And by the end, you know, we hope that you guys are going to have a much deeper appreciation of, of the severe convective storm landscape.

So to help us on this journey, we've got Mark Bove here with us, who's been who's using his meteorological and climatological expertise to help improve our property and catastrophe over here at Munich Re for the past 20 plus years.

You know, just a little bit on Mark's background.

He graduated as a research assistant at the at the Florida State University in Tallahassee, FL.

You know, he holds a master's degree and a bachelor's degree in meteorology.

He's researched short term climate variations and probable to stick modeling of extreme weather events, you know, and while he was there, he conducted research on short term climate variations.

So he also hold the CPCU designations and associate reinsurance professional and he's certified in catastrophe risk management.

So without further ado, ladies and gentlemen, let me present Mark both.

Mark Bove:

I am a meteorologist by training.
I spent 18 years within Munich Re US Divisions Catastrophe management unit and I've been for the past six years or so within our Digital solutions unit working on bespoke geospatial and Natcat solutions for key reinsurance clients.

But meteorology is my first love, reinsurance and insurance is my second.

And I'd like to take a step back and talk about the peril of convective storm, which is really becoming a much bigger loss driver in the United States as compared to 2030 years ago and has become a major profitability issue for property writers in for both personal lines, commercial lines and specialities like a public nonprofit as well.

And once I can, my slide deck response.

So short agenda today, I just want to give a couple of definitions and background information just in case you're not that familiar with the property space and about convective storm.

And then I want to talk about the lost trends that we're seeing from convective storm and why they are happening.

Then I want to quickly transition to how can we prevent these losses in the future.

And the story really is, is for when we already know how to do that hail, we're getting better, but there's still more work to be done.

And then like to summarize quickly and then be happy to open it up for questions.

And yes, I needed to fill space.

So that's a photo of yours truly setting up a hail, a measurement device out in front of a supercell tornado near Amarillo, TX two years ago.

So quickly, if you're not really in the property space, you might say what the heck is a severe convective storm?

It's really just a meteorological term for any type of thunderstorm and in case, in this case, severe thunderstorms.

And So what makes a thunderstorm severe?

Well, according to meteorologist and as defined by the American Meteorological Society, a convective storm becomes severe.

One criteria it could meet is that it has a tornado, probably with the movie Twisters out this summer, you're probably not unfamiliar with what tornadoes are.

There are rotating violent updraft into a thunderstorm.

Any thunderstorm that produces a tornado is considered severe, regardless of whether it's an EF0 tornado, the weakest on the measurement scale, or an EF5, the most intense tornadoes of on Earth.

And also always like to mention that, you know, even though we're used to seeing a funnel cloud with clear dust and not condensation like we've seen the image, a tornado can exist without a visible funnel cloud and can exist without it.

But typically with the debris and dust it's kicking up, you will see a funnel cloud with it.

But on an average annual loss basis with respect to property insurance in the US, tornado does tend to be the smallest component of SES loss because it is the most rare of the three severe thunderstorm criteria.

And also the spatial area where tornadoes impact tend to be much much smaller than the other two severe thunderstorm criteria.

So the other criteria are is hail greater than one inch in diameter hitting the ground.

Hail is just large pieces of ice that are formed in within a thunderstorm and strong updrafts keep it up aloft in the storm.

And super cooled water can accrete and make the ice ball grow bigger and bigger until the updraft is no longer strong enough to support it, or the stone gets kicked out of the storm by some turbulence or something else.

You probably don't need to tell this audience as well that again, on an AOL basis, hail is the largest driver of convective storm loss in the United States, and it's not even close.

It likely accounts for at least 6070% of all convective storm losses in the US annually.

Leslie, and probably one of the least known for until the past couple years is what we just call straight line winds.

And that's just a catch all term for any type of non-tornadic, non-rotating winds stemming from a thunderstorm and they can exceed 130 mph like the Duratio in 2020 in Iowa did.

And you can see the Duratio in the top right and you can see some of the wind speeds measured by radar apologize over Cedar Rapids from that event reaching in excess of winds that would be an equivalent of a Cat 3 hurricane.

So there are different types.

The ones we're most worried about are deratios, which are these widespread long lived straight line windstorms that move for at least 240 miles.

For example, the Deratio shown here 'cause about $6 billion of insured property loss, a record for Iowa and there, but there are others.

Microbursts and downbursts caused by wrinkle air are usually much more smaller in geographic area, but can also cause isolated peaks of damage.

Now the issue with straight line wind it actually because straight line wind events are much more common than both hail and tornado.

It ends up being the second largest driver of SCS loss in the US Amplifying this is the straight line wind damage is typically seeing more east of the Mississippi River, where population densities and the built environment is much more widespread than West of the Mississippi.

And that population under the more frequent area of these types of storms helps increase the relative losses that we see from them.

Now, I wanted to share some climatologies about all these perils.

And you'll see climatologies and probabilities of having any tornado right now by week as the year goes by.

And you can notice at the beginning of the year, it starts in the Deep South, then it migrates into the northern tier of the country.

We still see a little maximum in Florida, and that's a result of hurricane landfall during the summer.

But you can see as we get into November fall, we have a little extra peek here in the Deep South, but then it expands again as we go into the next year.

So usually we have about 1400 to 1500 tornadoes per year.

I have 1300 map about right, but it can vary quite significantly from a given in a given year or just over the past 20 years or so, we've seen a minimum of 943 and a Max of over 2200.

And so those are the key points, but really tornado does not tend to be driving this.

Excuse me, I am being butterfingered on my slide so I apologize.

Now hail actually shows a very similar pattern.
This is large hail greater than two inches, but it shifted much more over the southern plains, Texas, Oklahoma, and Kansas then tornado winds.

So for really large hail, it's much more rare further east.

But the real big hail problem really comes in the area that most people consider traditional Tornado Alley from Texas in the South, stretching N through the Dakotas, Iowa, Nebraska in the north.

Now once again, for all types of large hail greater than one inch, you know, it can vary greatly.

We only had 3800 hail reports observed and reported by the federal government in 21.

But in 2008 we saw almost 14,000 reports.

So there can be significant inter annual variability in the amount of hail.

And I should note that the significant hail that we're most worried about really only takes up a very small percentage, maybe 3 to 5% of all the hail events that we have in a year.

But those large 2 inch and greater stones are the biggest driver of hail loss.

Lastly, I to mention the straight line winds and you'll notice as we go into the spring and summer months here, the maxima and likelihood of where these events occur actually really blossom over pretty much the eastern half of the country.

But really the biggest maximas are over the Ohio River Valley and the Carolinas as well.

Then as you go back into the fall, which starts decreases again, we see incredible variability in the number of these events we see every year.

And once again notice those peaks across the east.

These are areas that are heavily forested that really when you have these strong straight line wind events, you get a lot of tree damage.

It downs on power lines and homes and that even though those damages tend to be relatively lower than what we see with hail or tornado, just the the sheer aggregation of them over a year makes it the second largest driver of thunderstorm related loss.

So that's just a quick primer on the background, I hope of the meteorology nerdity didn't put too many people to sleep.

But This is why we're really here talking about convective storms today is because 40 years ago in the early 1980's, the five year average loss to the property insurance industry in the US adjusted for inflation CPI only is about 2 1/2 billion dollars.

The five year average today is now about 32 1/2 billion dollars.

And with 2023 being a new individual year record of about 55 billion and insured losses, it shattered the previous record set in 2011 by almost $20 billion.

And similarly, this year has been very, very damaging as well.

We've had a lot of activity and even with year to date figures, we are already up to about 47 1/2 billion in insured thunderstorm loss in the United States.

Compare that to the five hurricane landfalls we've had in the US, probably that aggregates to about 25 billion right now.

So we're this year as of right now losses, property losses due to severe convective storm are still running about double those of the tropical cyclones that we have experienced, which is quite a statement given the level of activity we've had in the Gulf of Mexico in the latter half of this hurricane season.

So why are these losses going up so dramatically?

Really it is still overwhelmingly being driven by socio economic influences on the loss patterns.

And the biggest one there is, is urban, suburban and ex urban sprawl, particularly in areas of the country that are highly vulnerable to severe convective storms, particularly large hail.

So here's a satellite or aerial image of the town of Keller, TX, which is a little bit North West of Fort Worth in 1995.

And you can notice the left hand of the map.

A lot of it is just open empty fields that have not been developed, probably ranch land or farmland.

And in 1995, a tornado that might have hit the left side of the screen might not have actually hit much development, causing a minimum or no loss.

But look what happens in Keller, TX as time goes on and focus more on the left hand side of the screen than the right.

2001 you start seeing a couple new developments fill in the gaps.

2005, almost the big gaps have been filled in with new residential developments, 2013 continued growth.

And the last image I have is 17.

And basically those open patches that once could have been 0 losses due to a a severe storm now are filled with hundreds if not thousands of homes that probably cost hundreds of thousands to a million each.

That wind damage will cause substantial losses.

So this remains still one of the biggest drivers of why we're seeing such an increase of convective storm losses.

Other factors include, and I thought I had a slide on this, I apologize is we have increased personal wealth of value of personal and real property.

Yeah, we have a lot more electronics and more damage able property than we did 30-40 years ago.

And one last piece, in many parts of the country, we do not build our homes and businesses or our public nonprofit structures to resist most of natural disasters.

We don't build to withstand wind very, very well in most of the country and we definitely don't build to withstand hail well, though that is solving that problem as I'll talk in a little bit is proving to be a slightly tougher challenge.

But overall this primary growth trend in the losses is socio economic driven.

We think there is a small climate component, but it's still just a minuscule piece as compared to all the socio economic drivers that we're seeing.

So in the past year when we saw the new record at Munich Re of the $55 billion or so in accident year losses due to thunderstorm in 2023, being our lead meteorologist, we said let's take a step back and try to understand why the year 2023 was so severe, almost $20 billion more severe than we've seen previously.

So we started to look at first at the 1st 5, the pre to 2023 in the previous four years and looking at the the counts of severe weather from thunderstorms over those years.

And first thing we look at is a tornadoes rated EF two or above on the enhanced Fujita scale.

Those are the Tornadoes that can that can cause a more significant damage.

They're equivalent to a Cat 3 hurricane relative to winds.

But we can see in 2023 we actually had a drought of significant tornadoes.

We only 65 of them were reported while the each of the previous four years had more than about double that amount.

So really the losses in 2023 were definitely not driven by tornadic activity.

Now if we look at smaller hail greater than an inch of 1/4, yeah, we had a active year for that size hail, but nothing really out of the ordinary as compared to the prior four years.

Where we really see a big jump is in particular was with that very large hail in excess of two inches.

And this is likely one of the key drivers of why 2023 was so damaging.

We had more large hail and unfortunately a lot of that large hail fell in.

Developed metropolitan areas across the country increasing the losses as well.

Because we can have a lot of large hail events, but they fall over open fields, we're not gonna care about it.

But really our studies showed that a lot of these events were Co located and likely drove those losses.

Now the winds were the straight line winds were also above average in reporting.

But it's very hard to tell how accurate these reports are because most of them are not done by meteorological instruments.

They're estimates by humans.

And humans are notoriously bad.

Even humans that are meteorologist at estimating wind speeds by just standing in them and guessing.

So overall, we really think that hail was the big driver here and you know there.

Here are some of the other examples of what's driving the trends in the United with SCS.

Once again, most of it is building stock and inflation.

We do see severity trends due to outpacing CPI, due to ageing housing stock that is not built to withstand these types of storms.
And then we have some other types of social inflation, including the neighboritis.
Hey, your neighbor got a new roof.

Why aren't you getting a new roof?

There is a lot of fraud in this space as well, particularly in Colorado, and it's been expanding to other states.

And then, of course, we have to worry about whether hail is changing due to climate.

Tornado hail is changing due to climate or other factors as well.

And we've looked at this from a number of inflation factors and we know that the post COVID environment had a very strong inflationary environment and the supply chain disruptions spiked the price of both labor and materials for a lot of homeowner related commodities.

However, we can see by 2023 when we had this record loss, really things had started leveling off and not really getting worse.

Further of all, even just a 5 to 10% increase in the inflation is not going to explain a record being shattered by $20 billion.

There has to be something else going on with the hazard in 2023 because we believe the inflationary and socioeconomics over the past four years simply cannot explain what we saw, which is why we, and of course we see this from products from ISO as well that post COVID, we do see a larger annual trend in homeowners average loss severity than we did in the previous pre COVID era.

And this is something that everyone needs to deal with because this is a real secular trend in the lost data that does not appear to be going away anytime soon.

So why was the 2023 year was so severe convective storm?

We really once we start digging into it, what we discovered it's is it really wasn't the springtime thunderstorm season that drove made the year so severe.

It was the summer thunderstorm season, which is really surprising.

The chart on the right is showing number of billion dollar at convective storm events by months starting in 1990.

And you can see are we had our first one in 1995 and you see then as in you know this is not inflation adjusted.

So there is these are nominal values.

But you can see as time goes on, we start seeing more whether it be inflation or the severity of the events.

But typically most of the very worst of the worst stayed contained within March, April, May.

Once in a while we'd get one into June.

But look at 2023, we had a total of $9 billion SES events during the June, July and August of 2023, which almost equals just slight lightly is less than the total number of billion dollar loss events we had in those three months prior in all of history, which is a dramatic statement which told us something really unusual was going on in the summer of 2023.

So we wanted to dig down more into this for our own understanding and so we can share it with our clients as well.

So what we what we did is we plotted industry losses from convective storm for the spring and summer seasons for four years, 2020 in the upper left all the way through 2023 on the lower right.

And this these are the active seasons and you do see a lot of variability.

But you know, what you see in most of them is you see, you know a relatively good spread around the country.

If you look at the spring of 2023, you know it doesn't look, it looks we're a little more active than maybe the spring of 2020, but really nothing outside that's really shocking or unordinary that we haven't seen at some level in the past.

Now, remember what I told you earlier with those climatology maps, as we go from spring to summer, most of the severe activity shifts from the Southern Tier of states up to the northern tier of states.

And we saw this in three of the four years that we were looking at.

We saw this in 2020, including the Iowa Duratio that went through Chicago as well, you know, summer of 2021, South Dakota, Nebraska, Wisconsin, nothing really very little in the South.

Same thing with 2022.

But if we look at what happened in the summer of 2023, the South again is lit up like a Christmas tree and especially in areas with a lot of population like Houston, Dallas, Fort Worth, Denver, though it's not in the Red Square I put up.

And also Arkansas also had significant losses in the summer.

So we're seeing what we saw as far as convective storm loss in the summer of 2023 was really unlike anything we've seen prior in the past in this area.

So the next question is meteorologically, why was the South, the Deep South in Texas so active when usually all that activity dies down by the time summer gets here?

And right now we're looking at just losses for billion dollar events.

We did look at the events not included in Texas and we it just wasn't the fact that there was more billion dollar events.

The residual loss was still in range of the other four years.

So this is not an artifact of only looking at a subset of the data where looking at here, this is an actual signal that yes, those high end events were significantly higher and that residual loss from weaker events was still present in Texas.

So the reason why we had so much severe thunderstorm activity in the Deep South over June and July, August of 2023 is Long story short, and I don't want to put everyone to sleep with a lot of in depth meteorological analysis, but the weather was stuck over the summer of 2023.

So if you remember summer 2023 was characterized by very strong heat wave over southern Texas and Mexico.

There was another strong heat wave had by a strong high pressure Dome over Canada which help fuel the Quebec fires and we actually had anonymously low pressure over the eastern and West Coast.

Now if I show what the general, the jet stream look like during this time, you'll see it's indicated by the Red Arrows.

So this pattern kind of looks like the Greek letter Omega.

And in meteorology we call this kind of a pattern in Omega block because the circulation looks like it.
But basically what this is showing, because remember our atmosphere, like water is a fluid.

What we're looking at here is during the summer, the steering currents in the upper atmosphere, the jet stream weakened and then instead of being strong and moving quickly, it starts to meander.

Think of what the Mississippi looks like near the in Louisiana Loop, Mississippi itself, you see a lot of Expos and meanders in the river because it's moving very slowly.

The same thing happens in the atmosphere as well.

These happen several times a year globally over different parts of the both Northern and Southern hemisphere.

And in this case, it is the unique setup of where this Omega block came to be over the summer of 2023 that really drove the convective storm losses.

And just, you know, 22.8 billion out of the 54 billion roughly total came out of the summer of 2023 / 40%.

The spring losses March, April, May and the rest of the year were very high, but they were not unprecedented like summer was.

Now why did this Omega block make the steep S so conducive for severe thunderstorms?

Well, there's a whole bunch of list of meteorological reasons.

Long story short is it set up almost near ideal perfect conditions for severe thunderstorm formation and hail formation everyday consecutively for weeks over at a time over the same general area of the southern US.

Because the pattern was stuck.

It was me.

It wasn't going anywhere.

So things just repeated itself over the same geography over and over.

Now I mentioned Omega blocks are not uncommon.

They come occur most in summer when the temperature gradients between the poles and the tropics are the weakest.

But the good news is, is even though Omega blocks are common, you know, whether the summer of 2023 repeats again is going to be critically dependent on where an Omega block sets up at that time of year.

For example, we had another Omega block over the Western US centered over Washington state, British Columbia in 2021.

But that one did not really impact SES activity because that core of where that null space between between the the inflow and the outflow of the Omega was over an area that's not conducive for thunderstorms.

So even though this happens comp these types of blocks happen every year, it's not always going to happen to impact severe thunderstorm activity.

In fact, the June 21 block actually was more responsible for the record heat and wildfires in British Columbia, Washington, and Oregon at that time.

Now, with our warming climate and the poles warming faster than the rest of the planet, that means that the jet streams might further slow down, particularly in summer, and Omega blocks might become more frequent in a warmer climate, which might increase the risk of these happening.

And if it happens in the same place as it did in 2023, we could see a repeat of the severe weather in the Deep South.

But regardless of these blocking patterns, just the sheer fact that we have more summertime heat and moisture in our atmosphere due to our warming climate is likely also to some extent driving longer term summy SES loss trends even without Omega blocks.

And this is the summer loss trend for convective storm.

We are now up to 10.1 billion for 2024.

But you know, that's really in line with the historical summer pattern and is really not an outlier as compared to 2023.

So good news, summer was not nearly as bad as last year, but still 10 billion is still the second, the third highest on record for summertime activity in the US.

So quick, what am I through?

I want to transition now to talk about how do we break this cycle?

We've seen losses go up and up and up over the past 40 years.

Is there a way we can finally start getting out of this cycle?

Whether you're dealing with regular property risk or public nonprofit, you know the lessons that we can learn from previous storms and other type of wind, including hurricane, can inform us a lot about how we should be building in thunderstorm country across the across the country.

So in order to understand what we can do for thunderstorm wind, we need to look at where we have a lot of good claims data, which is with hurricane Wind and in particular what Florida has done with their home own personal, residential and commercial building codes over the past 20 years.

As you are probably aware, after Hurricane Andra 92, Florida started updating their building codes, which were finally released in 2021 and reinforced and upgraded in 2021.

Now Hurricane Ian came ashore on the Southwest Florida coast in 2022 and afterwards the Insurance Institute for Business and Home Safety.

Full disclosure, I am Vice Chair of their research advisory Committee, and I've joined them on many surveys, including That Hill study that I showed in the table of contents.

But after Hurricane Ian, they studied about 4000 different structures outside of the storm surge zone.

So we're only looking at wind damage.

And they had the information of when these homes were built, when there was a roof replacement, if there was one, and they were able to see, you know, how does the modern Florida building code do hold up when homes are exposed to winds of 140 mph plus?

And the answers are quite astonishing.

So the first slide here is structural performance.

You know, we see here black is single family dwelling, blue is like commercial, tan is multifamily.
We can see for structural damage.
And by structural damage, I mean that part of the wood roof decking is off, not just the shingles or that you've lost a Gable end or a wall exterior wall on the building.

That's what we say when we're talking structural performance.

If we look at all the 4000 home studied, look at the period post 2011, 2010, 20/11/2001 to present, almost no buildings in the 4000 that they studied had any structural damage due to a Cat 4 hurricane.

This is an astounding result that we really did not have any major failures for that modern construction.

This is important in both of terms of claims, but it's also a major improvement in terms of life safety because those are homes that are still standing that remained overall intact, even though they might have superficial damage.

And that means that that family can stay in there and not have to evacuate and be stuck on an Interstate for 12 hours.

And it also means that local communities can get and businesses, if they're not damaged, can get back on their feet a lot better.

Same with on public nonprofit response or the response of, you know, other religious organizations that want to get in there and help with recovery.

And we can go further here where the IBHS uses a four point, a zero to four point scale to rate damage.

Anything below a score of 2 is superficial damage by like roof the shingle you lose shingles you or you have some of the underlayment of the shingles gone.

Anything above is you're losing the actual roof deck or wall failures.

So the scale on the Y axis and X axis, same for both.

The top is the pre 2002 construction and the bottom is the modern construction.

Note that even winds in excess of 140 mph, we had no structural damage to modern Florida building code construction.

This we had.

Of course, we lost some roof cover, we lost some underlayment, but this is a a remarkable success story because Ian made landfall very close to where Hurricane Charlie did in 2004.

I had the privilege to survey both, and in areas where Charlie came ashore, like Punta Gorda, FL, there was structural damage everywhere on almost every home.

Now 18 years later, with the modern Florida building code, going through the same town with a hurricane, roughly the same intensity, almost no structural damage, this is a success story that really really needs to be copied and reproduced across the country.

The issue is is Florida now has a 20 year head start of building up a more resilient building stock and most states across the US have not even started to think about that or have not have decided not to do it.

Of the buildings that actually had structural damage, most of them had a large carport or overhang or a pool screen enclosure.

I know most of your public entity risk is not going to have a pool enclosure, but you know overall keep an eye out if you have any type of large overhang or or openings into a a big building.

Those are typically major drivers of potential wind loss and there are ways that you can protect your the structure from this as well.

But you're probably better off in the 1st place to not have it at all.

So talking a little, one of the success stories with the Florida building code is having all homes having wind rated garage doors and also for commercial buildings to have wind rated roller doors and other types for like loading bays, etcetera, for like maintenance facilities and others.

And this is an example of tornado damage from Madison IN And I look at this photo and I can tell immediately that this roof was lost because the garage door failed.

The winds blew in the garage there.

The pressure in the garage pushed the rest of the window, the roof off and off the house.

So if we really did not see this, the wind rated garage doors in Florida held up very well.

And this is and garage doors is one of the key entry ways that wind gets into a house and damages it.

And there's really no good reason why we aren't putting wind rated garage doors on detached and detached garages all over this country and thunderstorm prone areas.

It is a major vulnerability of our homes, but it is relatively easily fixable and and relatively compared to retrofitting a entire building fairly cost effective overall.

So quickly.

This is alter frame what Florida's done and it really is a success story.

Almost all structural damage gone doors, windows and opening protection that the Florida code requires all work incredibly well.

It was shocking it was at how good it performed during a cat four event.

However, of course there are areas for improvement.

Soffits and flashing on the side of the roof still would have.

We saw problems with the roof coverings are still getting blown off even though the structure is fine.

Siding is also an issue that the wind gets underneath the vinyl or the vinyl gets brittle after years in the hot sun and UV rays and breaks off.

And really again, I want to reinforce wind related garage doors can solve a lot of problems with wind across the country.

But even though Florida has had good building codes for 20 for 20 years, in the 30 plus years post Andrew, you know, other, a lot of other states in the US along the Atlantic Coast have not followed.

Louisiana did change and improve their codes after Katrina in 2005, but the state of Louis of Mississippi did not.

They leave it to the local communities on the coastal counties to set those wind codes.

But really not having good consistent wind codes across the state really doesn't make sense because northern Mississippi has thunderstorm risk as well that they're very prone to.

And the lessons that towns like Biloxi and others are presenting are doing along the coast are effective inland as well.

But these are overall state, whether they have state level building codes, state level enforcement, contractor licensing.

And you can see certain states, particularly in the Northeast and Deep South are still very poor with relate with, with having good strong wind building codes.

The IBHS is now looking to expand this to the internal states.

And but the issue is, is they're all going to be orange because none of those states have strong wind building codes.

Typically it's a peak 3 second gust of 90 mph, which is a weak EF 1 tornado.

We can build to withstand a lot more than an EF 1 tornado and and we can do that relatively inexpensive if it's done from the ground up when a new home is built.

So we really need to continue to stress and get better building codes into our all areas that are prone to high wind, thunderstorm winds as well as hurricane related winds.

Now I want to talk about the wind, the wind performance of the roof cover itself, the metal roof, the shingles, the tile and to give a little explanation of what we're seeing.

So here we see the roof age in years on the X axis, percentage of roofs with detectable damage on the Y axis.

Black is asphalt, green is metal, tan is tile.

So we can see across the board, metal roofs do very well when installed properly with wind.

Even metal roofs older than 20 years, maybe only one in five suffered some level of damage.

Compare that to shingles where really after 9 or 10 years we start seeing that the shingle rate of failure really starts to sky rocket.

And by the time you get to 1718, nineteen, 20 years of age, you know, 4 out of every five single roofs is likely to fail in a wind event due to these storms.

They'll fail in a wind event like a hurricane or a bad thunderstorm event.

So yeah, we're seeing this.

And even though this shingles say on the packaging that they have a warranty, that they last 30 years, unfortunately, in reality, we're seeing that most of these shingles are not performing very well once they reach 10 years of age and older.

The head of the IBHS, Roy Wright, likes to say having a 10 year old shingle roof on your house is like having ball tires on your car.

On a nice sunny day, it's going to work just fine.

But on a bad wet, windy day, you're going to have problems keeping your traction on the road.

And here's another way to look at this.

This is by age of the asphalt shingle roof on the Y and wind gusts.

And you can see that once you get past particularly 15 to 17, but really it starts around 9:00 to 11:00 where it starts to go up.

You can see 97% of of of asphalt roofs damage even in the lower winds of a low cat 3 and of course higher in the higher wind bands in EN.

But if we look at the metal slope roofs, you know one out of every 3 instead of virtually all with shingle.

So metal roofs are performing much, much better.

And if you are really not in large hail country might be a better answer for you and for a wind resiliency of your facilities in public in public entity risk.

Unfortunately, the metal roofs do cost more, but ultimately, considering they are lasting at least 20 years, more than double the cost of asphalt shingle, it might ultimately, if the funds are available, be worth it to make that investment in resiliency.

Concrete tile also performs relatively better, but it's still one in 3/4 times the cost of your standard asphalt shingle.

Now all of this has been regard to wind.

As I mentioned hail is proving to be much harder not to solve with regard to the materials that we use on our buildings.

And the IBHS does a lot of testing of a lot of different products that are on the market for different for roofing across the United States.

And they conduct hail impact tests using real ice balls that are simulated hail to try to understand how these products are performing both when they're first put on a roof and then how they age over time.

And as you can see, most of the products on the market for initial quality, they're rated for overall rating and then three different types of damage to the structures after being hit by hail.

You can see that overall they perform pretty well on initial quality.

But once they're installed on a roof and spend some time up on a roof, they start to degrade.

And we've only in the past couple of years come to discover how quickly some of these roofs can degrade.

This is an overall one for having asphalt shingles aging in South Carolina in the sun in the elements for one year.

And you can see most of the products did see a slight overall decrease.

One showed an increase and sometimes some products after a year they get a better meld.

They meld together the glue on the shingles.

Sometimes we see it actually performs better.

But overall most of these started to get worse after one year of age and you know for breach impact only one year really did not have a major difference.

Some actually perform way better.

The issue that we're seeing that really damages the long term performance of the shingles is after one year of being out in the elements for most of these products, we already see significant granular loss of the granulars that are coat the surface of the shingles.

And you know, one of product actually did not show much, but the other five showed significant sometimes dropping by two or three points in the score of of how well they the granule stayed on the shingles while on the roof.

Because hail can remove this large raindrops can dislodge enough and even enough birds sitting on your roof over time can start to dislodge.

And the issue with the dislodging is because is that it allows the UV rays to get to the underlying asphalt and the UV degrades the underlying asphalt and asphalt and causes it to become brittle and more likely to break and RIP off in a high wind or get damaged in a hail event.

Same thing to vinyl siding.

After years and years of UV, it becomes more brittle and actually might shatter more easily if impacted by wind driven hail.

So we do see a notable decline in asphalt shingles even after one year.

But you know, we still don't have any good new products to really replace it.

You know, metal roofs, if you live in large hail country, can you live with the dents?

Are the dents covered under the policy as 'cause even if it's just cosmetic, you know, what can we live with?

And the IBHS is working to understand that, you know, if you have two inch hail dents in your metal roof, is it actually still going to function as if it was not damaged or does that cosmetic damage eventually lead to structural failures that can cause the building to be damaged?

Companies are working on next generation roofing products that might be a good solution to the hail impacts that we see right now with asphalt shingles.

However, because they're not at scale and not many people are buying them, they are four times more expensive than the standard 4 Tab, 3 tab asphalt shingles we see on the market right now.

So I know I focused a lot on residential and general commercial because that's where a lot of the data are with how our buildings perform.

But we know a lot of these lessons are easily extended to a public entity, religious organizations, etcetera.

You know, we know how to build to withstand the most, most of the wind events, but retrofits are expensive, you know, to open up a building to put wind, hurricane straps on the roof to wall connections be very expensive.

So it is very important that if you're worried about the resiliency and want to work to start breaking the thunderstorm damage chain is try to get resilience baked in into your organization's future building plans, regardless of whether the local or State Building codes are, because those codes are just floors.

You can do more for it.

And typically the additional cost to build to resilience standards like the IBHS is typically about 1 to 2% of the the base building costs.

So you I know budgets are tight in this area but it could make a difference and save you 10s of thousands of dollars in the long run by doing it.
So you know some of the other easy ways to mitigate existing structures.
Wind rated garage doors, I can't stress enough, you guys have probably fire stations with large Bay doors.
You know maintenance facilities for parks and rec with large Bay doors.

Those are all extremely vulnerable and if you get wind rated garage doors you can help protect those facilities.

Same with window protection and impact resistant glass.

I grew up in Cape Coral, FL.

Their new town hall is built like a fortress with shutters over it and it's performed well in both Ian and Dub Milton this past year.

For pitched roofs where you have an elevation, you know, even if you don't want to go in and replace the entire roof, if you need to replace the shingles, what you can do while the shingles are off is you can seal the roof decking.

This is now required in Florida where either you put felt or by two minutes tape over the seams of the plywood decking on the roof and that helps the water from getting in the house.

Even if you lose part of shingles.

And as you probably are aware, what are getting in a structure essentially double s the claim.

So this is a very easy way to help minimize claims.

If you have a bad event that damages your roof.

Again, impact resistant roof cover will help you initially.

Just be aware that it that 30 year warranty is not really going to work.

After 10 years.

The resistance from both hail and wind is going to degrade significantly for hail even sooner than that for flat roof buildings.

You know, one of the things you know, along with climate and the thunderstorm perils is we're seeing more heavier rains.

And if you have flat roofs, heavy rain and or snow not associated with thunderstorms can cause a roof collapse.

So continue to make ensure proper drainage of those types of roofs and make sure a little bit of without having to retrofit or redo your roof inspections matter.

You know, have people go up there at least on the annual basis.

Look for rips, tears and bubbles and any membranes.

Build a patch with tariff needed.

And the other item I would say is avoid any type of ballast with very small rocks because those in a high wind event can become bullets and projectiles and damage windows to your own building and then buildings downwind as well.

So if you're gonna do a rock ballast roof or have that type of roof, go for bigger rocks that are likely not going to get picked up.

So I know I've said a lot and I'm probably running over time, but some quick take home points.

You know, with right now we can.

Our society continues to do the same things over and over again without much change in how we do it.

With regard to thunderstorm losses, that means that losses are going to continue to increase over time.

Last year's outlier built $55 billion accident year loss will be an average loss sometime in the future and probably sooner than we they like to admit.

So as I mentioned all through the slides, many SCS prone states don't have built strong wind codes.

You know we can do better and this is not just for the built buildings and up and reducing claims on property insurance.

This is a life safety issue as well and we need to reinforce that with our clients.

You don't want your family to be in a house that will fall down in a 90 mile per hour gust.

We can and know how to do better and we should be selling that resiliency as a feature and not just as something that makes things more expensive.

So, you know, again, any existing structures fortify those large openings as best as you can.

And I provide an example, the link to the IBHS codes for resilient residential and commercials construction, which can be easily applied to public nonprofit as well.

So that is a lot of information.

I hope some of it stuck, and I hope I didn't impress anyone with not having a better solution to hail, But this is where the science stands right now.

I want to thank everyone for their time and attention this afternoon, especially if we're sitting through three presentations now at this point.

I thank you, Peter Lauren for having me, and I'm happy to take any questions you might have.

Peter McKernan:

So, so Mark you, you mentioned that the number of days with the 20 plus EF 1 tornadoes has increased by a factor of 2 to 3 and over the past 40 years.

Can you provide a little context on specific events or conditions that's driving the change and, and whether it's related to natural variability or a human induced climate change?

Mark Bove:

You sneakily went into my appendix for that question, which I did not share previously.

I did not really talk about convective storm and climate much.

But what Peter's referring to here is now on the screen is one of the things we've just seen in the historical record over the past 40 years that we see fewer days with one tornado occurring per year.

But the days where we have a big outbreak, those outbreaks are getting bigger.

We're seeing fewer days with tornadoes, but the days that have tornadoes will be have more associated with them.

And you know what, Peter, no one really knows why this is the case.

There's only hypotheses right now.
There's, you know, some, it could be just where they're occurring that there's, you know, there's a little bit more energy, especially with these bigger outbreaks east of Mississippi River that we've seen more predominantly over the past 40 years.

Other people have hypothesized it's for some reason these big events are ringing out all the energy in one day in one big event.

So there's not as much energy leftover on lingering days for tornadic activity.

I I know that's not a great answer, but to be honest, no one really knows why this trend is occurring.

We just have observed it.

All right.

Peter McKernan:

OK, one more.

So you discussed potential impacts of climate change on on the convective storm piece.

Can you elaborate on some of the research?

I know that you've shared some that's being done in this area and what steps can really be taken by some of these individuals and communities which you which you mentioned a little bit on building some of that resilience, you know, in the facing of this changing climate that we have.

Can you provide any other detail on how you can anticipate and prepare for some of this cClimate change?

Mark Bove:

The long and short of the climate change convective storm is we really don't have a good idea.

You know, we've seen a long, a short term over the past 40 year trend as you see on this map towards more tornado activity over the Mississippi River and Ohio River valleys over the past 40 years, then over Texas and Oklahoma.

That being said, you know, we don't know if this is climate or just natural variability that for some years for some reasons, all the activity shifted further West and now it's shifted further E.

The issue with this activity all being shifted further E is similar to what I mentioned with straight line winds in the beginning, is that east of the Mississippi River, you just have far greater populations, a lot more smaller towns dotting the landscape that mean that when you do have severe thunderstorms in this region, it is much more likely you're going to hit a metro area, whether it's a smaller town or moderate or big, you know, hit a town and it have a lot of damage as compared to particularly western Texas where there's a lot of open space where nothing gets damaged.

So that's one piece.

But overall, in a warming climate, we probably expect because of increased moisture and heat in the atmosphere that there are will be more days per year east of the Rocky Mountains where severe thunderstorms are possible.

So imagine, and I'm just giving an example here, this is not real data.

Imagine the atmospheric conditions in Chicago and our current climate are conducive for severe thunderstorms 10 days a year in 205020602070 that might become 14 or 15 days a year.
That doesn't mean you're going to have the severe weather.
It just means the conditions there are possible that it could form.

So, but other than that, again, this is all about life safety and trying to stop the wind from getting into the buildings there.

You know, the issue is I, I know I harped on wind-rated garage doors a lot.

Thus The Dirty secret is, is you can't find them at your local Menards, Home Depot or Lowe's unless you live in Florida, which mandates it.

So it becomes very hard because there's no demand.

They're not putting it in stock anywhere.

So again, you know, I, it is expensive to retrofit.

So I really strongly say if you do have any future plans, get that resilience bit built in then because it is far cheaper than to retrofit.

And of course I gave other examples of what you can do relatively inexpensively now.

But otherwise, you know these losses are not going to go away.

And even if you do everything right, if you have a bad wind event, you're likely to have some damage.

The key is to minimize that damage and minimize claims for both your so you can maintain operations hopefully and also minimize issues with life safety as well.