Lessons from Hurricane of ’38 can limit losses today

By Patrick Anderson
PBN Staff Writer

Seventy-five years ago last month, The Great New England Hurricane, or the Hurricane of ’38, altered the southern New England coastline and perception of the region’s vulnerability to severe weather. Since then, meteorologists have made huge advances in hurricane forecasting unimagined in the 1930s, while communities have built storm barriers and coastal fortifications. But we’re still vulnerable. Karen Clark, whose consulting firm advises businesses and insurance companies on catastrophe risk and modeling, has developed new tools for estimating the losses that will occur from different storm tracks. She recently released a report on what we could expect if a storm like the Hurricane of 1938 landed in New England today and discusses that and other unpleasant scenarios. More

To continue reading this article, please do one of the following.



NEWSMAKERS

Lessons from Hurricane of ’38 can limit losses today

COURTESY KAREN CLARK & CO.
STORMY FORECAST: Causing about $600 million in damages at the time it occurred, the Hurricane of 1938 would cause roughly $100 billion in damages today, says Karen Clark.

By Patrick Anderson
PBN Staff Writer

Posted 10/14/13

Seventy-five years ago last month, The Great New England Hurricane, or the Hurricane of ’38, altered the southern New England coastline and perception of the region’s vulnerability to severe weather. Since then, meteorologists have made huge advances in hurricane forecasting unimagined in the 1930s, while communities have built storm barriers and coastal fortifications. But we’re still vulnerable. Karen Clark, whose consulting firm advises businesses and insurance companies on catastrophe risk and modeling, has developed new tools for estimating the losses that will occur from different storm tracks. She recently released a report on what we could expect if a storm like the Hurricane of 1938 landed in New England today and discusses that and other unpleasant scenarios.

PBN: Why did you decide to look back at the Hurricane of 1938?

CLARK: Well, the 75th anniversary and to illustrate what the losses would be if a similar storm happens today. The report illustrates why our technology is more insightful than the catastrophe models. Models were never designed to do this, but what has happened over the last decade is companies are very focused on the 1 percent probable maximum loss number. Ratings agencies and regulators will look at this one number and peg lots of stuff to that, like a company’s capital requirements. It is a little bit crazy because this number is highly uncertain.

PBN: We have a lot more buildings along the coast now than in 1938, but we also have better defenses, such as the hurricane barriers here in Providence and New Bedford. Are we more vulnerable to extreme losses from a similar hurricane than we were 75 years ago?

CLARK: You have to separate wind damage from flood damage, because insurance companies are covering wind damage. For wind we would have a lot more exposure than we would have in 1938 because there are a lot more buildings and they would cost a lot more. We calculated if we took the footprint of the 1938 storm, there is more than $13 trillion in property value in the footprint. We have an enormous built-up residential, commercial infrastructure that is going to have wind damage. Those aren’t going to be protected by the hurricane barriers. Now if we look at the flood damage, the most important thing is most of the flooding damage is not going to be insured.

Next Page
Calendar
PBN Hosted
Events

Two Great Programs...One Great Event. PBN's Annual Celebration of Growth and Innovation is now underway. 2014 applications are now available. Deadline August 1st.
  • Healthiest Employers
    Celebrate with the Healthiest Employers in RI on August 14th at the Providence M ...
  • 40 Under Forty
    Thank you to our sponsors and to all those who attended the 10th Anniversary of ...
Advertisement
Purchase Data
Book of Lists
Lists
Book of Lists cover
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.
Data icons
Data can be purchased as single lists, in either Excel or PDF format; the entire database of the published book, in Excel format; or a printed copy of the Book of Lists.
  • Purchase an e-File of a single list
  •  
  • Purchase an e-File of the entire Book of Lists database
  •  
  • Purchase a printed copy of the Book of Lists
  •  
    National
    Local
    Latest News
    Advertisement