April 19, 2010
Dr. Howard Botts on Storm Surge
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by Susan Smith - Managing Editor
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Industry News

Dr. Howard Botts on Storm Surge

By Susan Smith

Dr. Howard Botts, executive vice president and director of database development at First American Spatial Solutions, a division of First American, spoke in an interview about the company's storm surge dataset, adding to the large number of environmental hazard and regulatory compliance datasets the company has built that are geospatial-centric.

In recent years, storm surge data has become a priority, as wind and water have carved a unique path through America's landscape and become a determining factor in insurance coverage, as well as influenced other markets. Storm surge data has naturally become an important complement to First American's parcel boundary and property datasets. The company has issued a comprehensive First American 2010 Storm Surge Report, Residential Storm Surge Exposure Estimates for 13 U.S. Cities, detailing the storm surge impact on insurance and a report on 13 cities that are likely to be impacted by storm surge.

View of storm-surge impact on downtown New Orleans looking towards Bourbon Street. A direct hit Category 2 hurricane would flood most of the downtown area in the event of levee failure.

Howard Botts: “One of the datasets we build is a coastal search dataset and like all of our datasets, we build it at the most granular level, which in this case is a 30x30 meter grid cell. We basically look at offshore characteristics to estimate the maximum possible storm surge that can be pushed up on shore, and typically that's related to atmospheric pressure, forward speed of a hurricane, wind speed, direction it strikes the coast, bathymetry, ocean bottom conditions. Once we figure out what the maximum storm surge is for each category, we then look at both natural and human created barriers to look at where the surge is going to push onshore and what things are going to
moderate it such as railroad berms, highways, sea walls, and natural corridors inward like creeks. Our goal is to look for each of the storm surge categories. We run millions of simulations, slamming different sized storms in into the coast and then determine what the maximum height of the water is going to be. We then create our storm surge footprints.

Although not reviewed in this report, a view of storm surge impact on Manhattan Island shows even a Category 1 storm could cause significant flooding if it were to hit the city directly

As a company, we've been collecting parcel boundaries in the U.S for a number of years. Now we're up to over 123 million, so we can take those parcel boundaries, overlay them on the coastal surge and understand for any property in the Atlantic or Gulf Coastal region, what its surge risk is. And because of these barriers, elevation changes, etc. you can have adjacent properties that have quite different risk characteristics. The final piece of this is that our sister company, First American CoreLogic, maintains a property characteristic database for all the properties in the country. For this particular report, we basically married up our property information with our parcel boundaries,
we can tie them together either using the tax ID number or property ID number or address. Then we looked at what's the maximum exposure at each property in terms of storm surge. We haven't counted in this furnishing, autos, and other kinds of things, but we're looking at exposure of residential structures in this study.

GISWeekly: How are people using this data?

Howard Botts: Insurance is certainly a big part of the markets we serve and in particular, since Katrina, insurance has become very concerned with loss caused by wind and water. Most insurers always assume they will not have liability for any kind of flood damage, whether it be fresh water or salt water. Until Katrina came along and the arguments as to which hits first -- was it wind or water - it made them much more acutely aware of what their potential loss or exposure is in coastal areas. Now they've begun to look much more closely at surge. You hear a lot of arguments these days that with modern building codes if a structure is built to the local building codes it should be able to withstand the winds from a hurricane, so a homeowner or business owner can do a lot of mitigation against wind damage or wind loss. But they're essentially powerless to do anything against surge since that has a life of its own -- unless it's a large Army Corps of Engineers project or some local project. You're not going to be able to mitigate against that. So the commercial insurers are using storm surge to understand what their exposure is in terms of business continuity, business loss, since they do insure against water damage typically. Their property insurers are taking a look at where surge zones inundation areas are outside of the traditional flood plains. Do they want to
make recommendations depending on the severity of risk, recommending that their policy holders take out a separate flood insurance program even if they wouldn't be required to by their mortgage companies?

Our oil, gas, pipeline, telco and other customers are using storm surge as part of enterprise risk management, trying to understand what their infrastructure risk is. Certainly after Katrina, the offshore oil interruption and some of the shoreline facility interruptions made them acutely aware of it, and two years ago with Hurricane Ike -- although the storm went a little further east than was originally thought - we might have lost 40% of the nation's refining and processing capabilities if it had hit a little further west and taken out all the oil areas in the Houston bay area. And then increasingly, as other kinds of verticals start to look at this, particularly household portfolio
management companies, who are buying and selling distressed properties. They're beginning to ask questions about what are the risks outside of just the financial risk of the mortgage holder, but what are the environmental risks that we haven't considered.

It's got uses well beyond what it was originally intended for which was the insurance market, so we're seeing the dataset used widely.

GISWeekly: I'm noticing some newspaper articles about residents complaining that their insurance rates go up because they have been placed in a high risk flood zone, where they didn't have that designation before. How might your company address this concern?

Howard Botts: Yes, one of the things that happened with Google Maps and Bing Maps is that consumers have democratized access to air photo imagery in particular, so we now have every insured becoming an expert, in their mind, anyway, on what are their risks, whether it be wildfire risks, coastal surge, floodplain exposure, and so I think we're seeing a lot of people questioning their various assessments, particularly declines in insurance. We spend a lot of time working with our individual clients helping them understand the data and allowing them to explain why certain decisions were made. I think you've hit something that is an interesting trend. Five years ago we never saw individual home owners or businesses questioning and now people are very aware, and will go out and do independent research. That's why people are paying a premium for accuracy. You want to automate in insurance to the maximum degree possible and every time you get an individual query that becomes a fairly costly response. A premium on accuracy where you don't have to go back and correct yourself is what companies are willing to pay for. I think that's where we are particularly strong. The fact that we have parcel level geocoding and these granular hazard datasets, that if they're using a ZIP+4 base geocoder or street interpolation base often they have reason to question. In the
past, companies have had to reverse their decisions in a number of cases. So we get invited in with accuracy being our strong play.

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