4. Catastrophe Modelling

Question 1

What are the 7 targets of the UNISDR Sendai Framework for DRR?

Answer 1

1) Substantially reduce global disaster mortality by 2030
2) Substantially reduce the number of people affected globally by 2030
3) Reduce direct disaster economic loss in relation to global GDP by 2030
4) Substantially reduce disaster damage to critical infrastructure and disruption of basic services (namely health and education facilities), through developing their resilience by 2030
5) Substantially increase the number of countries with national and local disaster risk reduction strategies by 2020
6) Substantially enhance international cooperation to developing countries through adequate and sustainable support to complement their national actions for implementation of this framework by 2030
7) Substantially increase availability of and access to multi-hazard early warning systems and disaster risk information and assessments to people by 2030

Question 2

What are the UNISDR 4 priorities for action?

Answer 2

Priority 1: Understanding disaster risk
Priority 2: Strengthening DR governance to manage disaster risk
Priority 3: Investing in DRR for resilience
Priority 4: Enhancing disaster preparedness for effective response and to ‘Build Back Better’ in recovery, rehabilitation and reconstruction

Question 3

What is the definition of risk? (equation plus wordy)

Answer 3

RISK = f(hazard * exposure * vulnerability)

‘An uncertain situation involving exposure to danger

Question 4

Engineers often qualify risks as…

Answer 4

Losses: financial, casualties, downtime

Question 5

What is a catastrophe?

Answer 5

When losses exceed a given amount.

Natural - EQ, FL, LS
Man-made - Cyber attacks, terrorism, war

Question 6

Which 4 categories of events/catastrophes cause the greatest overall losses and give examples of each?

Answer 6

Meteorological (58%) - tropical cyclone, convective storms, local storms

Climatological (20%) - Extreme temperature, drought, forest fire

Hydrological (14%) - Flood, mass movement

Geophysical (8%) - EQ, LS, tsunami, volcanic activity

In 2018, overall losses were $160bn

Question 7

What do engineers do?

Answer 7

Plan, design, build, maintain and decommission infrastructures and structures

Question 8

A design deals with the ____, whereas assessment deals with the ______

Answer 8

New

Existing

Question 9

What are the disadvantages of models (risk modelling) (4)

Answer 9

• Models are no precise
• Data are not sufficient
• Natural variability
• Experience is subjective

Question 10

The framework for CAT modelling

Answer 10

(HAZARD) Event generation and Intensity calculation + (EXPOSURE) Asset identification
—>
(VULNERABILITY) damage estimation and policy conditions
—>
Loss calculation

Question 11

The _____ _______within the framework of ______ ______, provides the bases for _______ _______ _______ in the case of uncertain and/or incomplete information

Answer 11

Risk assessment
Decision analysis
Rational Decision Making

Question 12

In the asset identification section of the CAT framework, how do we classify properties by their main characteristics (3)?

Answer 12

Geographical resolution
Public or private asset
Age of the asset

e.g. for exposure identification of buildings, buildings are grouped according to their main structural characteristics (construction material, resisting mechanism and height)

Question 13

Damage estimation - intensity measures should:

What does the mean damage ratio vs intensity measure graph look like

Answer 13

Reflect relevant hazard characteristics
Reflect buildings response

The ‘Typical damage function’ is a roughly s shaped curve

Question 14

What does mean damage ratio represent?

Answer 14

The ratio of repair cost to replacement value

Question 15

How are damage functions derived?

Answer 15

Level 1: Simplified dynamic analysis
Level 2: Claims data
Level 3: Complex dynamic analysis
Level 4: Experimental testing

Question 16

Losses are expressed in terms of…

Answer 16

Expected Annual Loss (EAL) aka average annual loss

Losses can be building-by-building or total

The model for the loss assessment needs validation, validation is event based

Question 17

DR financing, traditional insurance
What is the payout basis?
What are the advantages and disadvantages?

Answer 17

Pay-out basis: Claims i.e. actual losses

Advantages: Pay-out = loss sustained

Disadvantages: Very slow processes - pay-out only pays insured assets

Question 18

Describe an alternative risk transfer instrument - CAT bonds

Answer 18

EQ risks are transferred to FINANCIAL MARKETS - much greater risk bearing capacity than insurance/reinsurance companies.

Investors purchase bonds from a third party, single purpose reinsure (principal) and receive relatively high return from the bonds

If a specified trigger event occurs (i.e. parametric trigger), the principal is released to the sponsor i.e. local gov

In cases no such EQ occurs before the bonds mature, the principal together with profit is returned to the investors

Question 19

Pay-out basis, advantages and disadvantages of CAT bonds?

Answer 19

POB - trigger mechanism (conventional CAT bond triggering mechanism is defined in terms of scenarios e.g. location and magnitude - scenario-based approach)

Adv - immediate pay-out, flexible bounds

Disadv - payout basis risk (Basis risk = difference between actual losses incurred by the sponsor and payment received by the sponsor

Question 20

Who are the three main end users of seismic CAT modelling?

Answer 20

DRR policy-makers in funding organisations e.g. WB/UN

Governments

DR financers e.g. insurers and re-insurance industries (CCRIF etc.)

Question 21

What is a decision variable? And what are 2 effective decision variables for urban FL risk management?

Answer 21

A decision variable is a measurable quantity supporting managers and stakeholders in decision making

Life cycle cost and return on investment

Question 22

What do LCC and ROI do?

Answer 22

Allow evaluating the economic and financial feasibility of different alternatives (e.g. different flood mitigation strategies).

LCC and ROI analyses can be performed at urban level considering as exposed asset a portfolio of flood-prone buildings

Specifically the reduced FL damage to the exposed asset can be seen as avoided costs or as returns