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Proposed Economic Loss and Report Generation

Module

Expert Panel Open Meeting

Austin, TexasAugust 7, 2014

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Agenda

Introductions Overview Proposed Economic Loss Module Proposed Report Generation Module Claims Data Review

Calibration Validation

Future Work Q&A

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Introductions

Sam Amoroso, Ph.D. P.E., S.E. Forte & Tablada, Inc.

Bob Bailey, Ph.D., P.E. Exponent, Inc.

Bill Coulbourne, P.E. Coulbourne Consulting

Andrew Kennedy, Ph.D. University of Notre Dame

Doug Smith, Ph.D., P.E. Texas Tech University

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Overview

1st Open MeetingAustin, August 22, 2013

2nd Open MeetingCorpus Christi, December 10, 2013

3rd Open MeetingAustin, March 13, 2014

4th Open MeetingAustin, May 29, 2014

5th Open MeetingAustin, August 7, 2014

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1st Open Meeting

Panel Member Backgrounds

The TWIA expert panel has been appointed under Insurance Code §2210.578 and 28 Texas Administrative Code §§5.4260-5.4268. The panel’s purpose is to develop ways of determining whether a loss to TWIA-insured property was caused by wind, waves, tidal surges, or rising waters not caused by waves or surges.

After the panel completes its work, the commissioner will consider the panel’s findings and publish guidelines that TWIA must use to settle claims.

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2nd Open Meeting

Present Preliminary Overall Methodology Initial Focus: Residential Slab Only Claims

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3rd Open Meeting

Present Proposed Hazard Module Methodology Goal: To provide a time history of wind, surge, and

wave heights for a given property location.

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4th Open Meeting

Present Proposed Damage Module Methodology Goal: To provide an estimate of component damage

attributable to wind prior to collapse of the structure due to surge forces.

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TDI Website

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Preliminary Overall Methodology

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Proposed Economic Loss Module Rely on TWIA adjusters to determine the

repair or replacement costs associated with the damage estimates produced by the model for the affected building components.

For example, if the model estimates that 10 percent of a roof covering was damaged by wind, then the adjuster would determine the appropriate scope of work and associated cost to repair or replace the roof covering.

It is the current position of the Panel that TWIA adjusters will likely have better local knowledge of the monetary values for specific property components, and therefore should not rely on the model per se to calculate such valuations.

Economic Loss Module

MonetaryStructure Losses

MonetaryContent Losses

Damage Estimatefor Building

Components

Estimate of Economic Lossfor Report Generation Module

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Proposed Economic Loss Module The module will include an estimate of

interior damages to finished surfaces.

Damage estimates produced by the model will exclude any estimate of damages to contents.

It is the current opinion of the Panel that TWIA likely has better knowledge of contents values for specific properties, and therefore should not rely on the model to estimate contents valuations and associated losses.

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Proposed Report Generation Module

Requires information from pre-storm and post-storm site-specific information, wind and storm surge hazard information, and building vulnerability and damage information to produce an automated report that represents the results of the Damage Module.

The economic loss results determined by TWIA adjusters based on results from the Damage Module would then be delivered to two parties.

One complete report for TWIA would provide an archived result of the entire damage and loss reporting activity for each property investigated.

A copy of this complete report would also be sent to the building owner so the owner could verify or correct the building, damage, or hazard magnitude information used as inputs to the model (i.e., feedback loop). Any corrections to the inputs could then be used to modify the calculated damage results.

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Potential Report Output

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Potential Report Output

The residence had a gable roof with 3-tab asphalt shingles covering. The maximum 3-second gust wind speed at mean roof height that the structure experienced is shown to be 99 mph. Based on damage function data, the mean damage state for the roof covering for this wind speed is 1. This damage state corresponds to a percent damage of <1%. Figure 10 shows the mean damage state for houses with 3-tab asphalt shingles covering that survived the hurricane on Bolivar Peninsula and the curves defining the lower bound, mean, and upper bound mean damage state. The mean damage state for the roof deck is 1 which corresponds to a percent damage of <1%.

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Preliminary Overall Methodology

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Claims Data Review: Calibration

Began by focusing on properties along the coast. Selected 96 claims on Galveston Island and Bolivar

Peninsula. Collected data on each property using information

from the claims files produced by TWIA, Google Earth™, and Pictometry™.

Defined storm surge levels and wind time histories for each property location.

Will use the information above to estimate damage levels obtained from proposed Damage Module and compare it to the claimed damage.

Adjust Damage Module where deemed appropriate.

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Claims Data Review: Calibration

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Claims Data Review: Calibration

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Claims Data Review: Calibration

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Claim File Review

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Claim File Review

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Pictometry™: Aerial View Before Ike

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Pictometry™: Aerial View After Ike

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Property Hazard

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Data CollectionTWIA file no.Address, City, State Zip CodeLat. Long.Policy Value, Building ValueBuilding SF, Approximate Length, Approximate Width, Perimeter (ft)Plan Shape (R, T, U, L)Roof Cover Type, Roof Shape, Age of Roof CoverOrientation of Long Axis w.r.t North (degrees)Exposure CategoryOverhead Garage Door (Y, N), Garage Door Panel Width, Garage Attached? (Y/N), Direction Garage Door Faces (degrees)Eave height (feet), Roof slope (X:12), Roof Ridge Height (feet)Estimated 1st floor elevation, Flood Certificate 1st Floor Elevation (ft NAVD88), Ground ElevationNo. FloorsYear BuiltFoundation TypeRoof Sheathing Type% Glass Area, Window Protection (Y, N)Exterior Wall Construction Type, Exterior Wall FinishFence (Y, N), Out Building (Y, N), Canopy (Y, N), Large Tree within Striking Distance (Y, N)Total Ike loss ($) , Total Ike Loss (% Value)

% Roof Cover Damage % Roof sheathing damage % Roof framing damage % Window damage% Door damage % Garage door damage % Shear wall damage % Out-of-plane wall damage% Wall sheathing damage % Fence damage % Out building damage % Canopy damage

Tree Fall DamageFlooded, Depth of Water (ft.)Litigation, Comments, References

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Future Work

Complete Calibration and Validation of Model Compare Ike damage with model predictions for same

location. Adjust model as necessary. Conduct randomized model validation using claim data

from Hurricane Ike. Present findings in next Open Meeting.

Peer Review

Finalize recommendations and present to TDI.

Continue with development of a method or model to estimate damage to commercial properties starting with slab-only cases.

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Q&A