Disaster Loss mitigation: Great Balls of Hail

Over recent years the largest catastrophic loss payments of most insurers have resulted from prairie hailstorms. During the 1990s, there have been six major storms, each causing catastrophic losses in excess of $50 million. The National Hail Conference, recently held by the Institute for Catastrophic Loss Reduction in Red Deer, Alberta, focused on prevention actions.

From the Institute of Catastrophe Loss Reduction’s (ICLR) perspective, hailstorm losses are a priority issue for Canadian property and casualty insurers.

The Institute’s hail conference in June focused on the Alberta Severe Weather Management Society (ASWMS) hail-suppression program, the ICLR’s hail-mapping research project, hail-resistant roof shingles, and a new technique to repair hail-damaged vehicles. The conference also investigated the shortcomings of Calgary’s sewer system.

Overall, the conference revealed four major factors responsible for the recent increase in hailstorm losses: population growth (particularly in western Canada), urbanization (accumulation/ concentration of property), aging, obsolete infrastructure (combined storm/ sanitary sewers, average age more than 50 years), and the increased frequency and severity of the weather.

Just for the hail of it

ASWMS, formed after the 1991 Calgary hailstorm, has successfully suppressed large hailstorm losses since June of 1996. The five-year pilot project will be completed on September 15, 2000. The program, which targets developing storm cells in a corridor west of Rocky Mountain House, reduces the impact of hailstorms in central Alberta. More than 100 members of Alberta’s insurance community contribute to its annual $1.5-million operating budget.

ASWMS director Jim Renick provided an overview of “hail climatology” while Dr. Terry Krauss presented a rundown of the Society’s cloud-seeding strategy. He notes that silver iodide crystals are scattered by flares from aircraft to increase the number of small hailstones and reduce the likelihood of large ones. In addition to examining the merits of the Alberta project, Dr. Krauss also examined similar programs in North Dakota and Greece. The conference included a visit to the hail-suppression operation at the Olds-Didsbury Airport.

This fall, ASWMS will ask the Insurance Bureau of Canada’s (IBC) Alberta advisory committee and the IBC’s Board of Directors to extend its mandate beyond 2000.

Mapping hail by postal code

The Calgary area is particularly vulnerable to hailstorms. ICLR has commissioned a research project to link the number of hail days with postal codes, this will establish a basic Canadian hail model for insurers.

This mapping project is based on Canadian hail research by David Etkin (Environmental Adaptation Research Group, Institute for Environmental Studies, University of Toronto) and by Erik Brun (Department of Geography, University of North Carolina). The model will provide insurers with accurate, comprehensive identification hail frequency and potential associated water damage. It will allow insurers to estimate incurred insurance loss for houses by three-digit postal code and to adjust their rating, coverage and deductible levels appropriately. Insurers can also determine their homeowner market share by postal code.

The project’s software will enable insurers to estimate their own personal and commercial property and motor vehicle possible maximum loss by postal code. The project would also help ICLR to identify areas that would benefit most from mitigation activity such as installation of hail resistant shingles. The hail-days-by-postal-code database would also lay the foundation towards mapping other atmospheric hazards.

Panel bonding saves $400 per car roof

Henning Norup, President and COO, Vehicle Information Centre of Canada (VICC), provided conference participants with an overview of a project led by Manitoba Public Insurance (MPI) with technical support from the Canadian Vehicle Research Council (CVRC) to reduce the cost of replacing auto roof panels.

Hailstones typically damage car hoods, roofs and trunk lids. While hoods and trunk lids can be removed and replaced fairly quickly, roof panels are structural. It is expensive to repair hail damaged roof panels since the process involves welding to remove and replace the panel. Also, the vehicle interior must be stripped to prevent damage and then refitted.

After MPI sustained over 24,000 damaged vehicles from the July 1996 Winnipeg hailstorm, the corporation experimented with different types of adhesives to glue roof panels. MPI conducted time/motion studies to demonstrate that approximately $400 can be saved per vehicle if the roof panel is bonded rather than welded. MPI also found it was easier to blend the panel because, unlike welding, the adhesive did not distort the metal.

MPI continues to examine the crash-worthiness of the bonded roof panel by subjecting vehicles to 30mph and 40mph frontal collisions into a fixed barrier. The preliminary observations and data indicate that there were no significant performance differences between roof panels that were glued or welded. The final report will be published later on this year. Also, MPI continues to study the effects of the range of temperature that a roof encounters in a 24-hour period, the impact of corrosion on strength of the repair, and material fatigue. In the future, information from these tests may be applicable for other repair applications.

Calgary’s sewers

Heavy rain often accompanies hailstorms, adding to the potential damage particularly where hail and debris are left to clog sewer grates. ICLR has started to examine the storm water capacity of sewer systems. Terry Prince, Chief Design Engineer, Sewer System, provided an overview of Calgary’s system. The City’s recent growth spurt has strained its sewer system. He drew there is a correlation between typography/ street grading and degree of water damage. He explains that water can enter manholes covers used to vent the sanitary system and produce sewer back-up damage. Calgary has embarked on a program to replace older style grates with more efficient ones to reduce hailstone and debris blockage. He notes also that sewer back-up valves can effectively reduce water damage.

TWELVE LARGEST CANADIAN HAILSTORMS

DateLocationInsurance loss*

September 1991Calgary$342,745,000

July 1981 Calgary$125,000,000

July 1987Edmonton**$148,000,000

July 1996Winnipeg$146,825,000

July 1996Calgary$119,091,000

July 1996Calgary$85,222,000

July 1998Calgary$63,216,000

July 1995Calgary$52,304,000

August 1988Calgary$37,127,000

June 1995Southern $26,389,000

Alberta

May 1987Montreal$24,900,000

July 1992Calgary$22,078,000

*Excludes crop losses and adjustment for inflation.

**Includes tornado damage.Source: IBC