From major wildfires just over four months ago, and now major flooding, Northern California seems to leap from one perilous state to another. This time, rainfall from a “potent atmospheric river”, as described by the National Weather Service, caused flooding to over 3,000 properties in Sonoma County. This atmospheric river – a flowing column of condensed water vapor pumped up from the Tropics which can be up to 375 miles (603 kilometers) wide – started delivering rain and snow into the region late on Sunday, February 24.
The small town of Guerneville (pop. ~4,500) fared worst, reporting nearly 21 inches (529 millimeters) of rainfall in just 72 hours by 5 p.m. local time on Wednesday, February 27. The source of the town’s flooding was the Russian River, which flows from Mendocino County through to Sonoma County, reaching a maximum level of 45.5 feet (13.9 meters) at Johnson’s Beach, near Guerneville. This exceeded the defined 40 feet (12.1 meters) threshold for a major flood at this point, with local media reports stating that this is the worst flooding since New Year’s Day in 1997, when the river rose to 45 feet (13.7 meters). The nearby Napa River also crested at 26 feet (7.92 meters), one foot above the flood stage.
The town of Guerneville, which was originally built on a meander in the river, on February 27 was declared by the Sonoma County Sheriff’s Office “… [as] officially an island …” as all roads in an out of the town were flooded. 4,000 residents in both Guerneville and Monte Rio (pop. ~1,200) were under evacuation orders until Friday, March 1.
Guerneville: A History of Flooding
This area is no stranger to flooding, with the Russian River towns nestled in a steep valley near the end of the river’s 110-mile (180 kilometer) length. On Valentine’s Day 1986, after six days of continuous rain, the Russian River crested at Guerneville with a record 48.9 feet (14.9 meters), and local reports state that 1,000 properties were damaged or destroyed. Events in 1995 and 1997 saw the river reach at or over 45 feet (13.7 meters), together with significant events in 2006 and 2016. Less severe floods are commonplace. Just two weeks prior to this event, the town had experienced a flood. One Guerneville resident even recorded a song mentioning how frequently the town floods. But it was the severity of this event that took the area by surprise.
California is no stranger to atmospheric rivers either. NOAA reports that between 30 to 50 percent of annual precipitation on the U.S. West Coast comes from atmospheric rivers (ARs), with just a handful of these “rivers” producing this sheer volume of water. As the plume of water vapor cools over California’s mountain ranges, the vapor turns into rain or snowfall. In addition to prolific rainfall, snow has fallen in abundance, generating causes for optimism as snowpack is vital for the state’s water supply.
The Sierra Nevada are now at 153 percent average snowpack for the year, with these aggressive ARs in February almost doubling the snowfall from January. At the Department of Water Resources Phillips Station at Sierra-at-Tahoe, snow depth tops 115 inches (2.9 meters), with reports of snow depths at 20 feet in places.
But what was good for snowpack obviously was not so good for the towns along the Russian River, as it is these larger, more powerful ARs that cause problems with extreme rainfall, flooding and mudslides. Factors such as AR-induced precipitation and flooding, as well as snow accumulation and melt, all need to be considered in flood modeling and thus are accounted for in the RMS U.S. Inland Flood HD Model.
The drama of the recent floods temporarily shifted the focus away from the fact that California needs the water. This wet winter has been a state-wide phenomenon. There are tales of snow that has fallen at much lower levels to normal, and snow that has fallen on beaches in LA. The recent heavy rains, cold weather and consistent rainfall since late November last year has now taken the state from being entirely in drought to 67 percent drought-free according to U.S. Drought Monitor.
Dampening Down Wildfire
But will a wet California winter result in a less ferocious wildfire season in the state? Areas close to Guerneville have seen major wildfires over recent years, including the Mendocino Complex fire last summer, and the Wine Country fires in 2017. And Northern California saw the devastating Camp Fire last November. Just three weeks after the Camp Fire, Butte County witnessed flooding as the scared landscape could not absorb as much rain as normal, leading to increased runoff and the potential for flash floods and disastrous mudslides or landslides.
California winters need to be wet, to counterbalance the Mediterranean conditions resulting in very dry summers where little or no rain falls. However, it might also just be the case that a wet winter produces a different type of wildfire fuel. Looking back at the very wet season that ended in early 2017, California saw 159 percent of its average annual rainfall, and excessive rain damaged the Oroville Dam spillway. Even after this wet winter, 2017 then produced a devastating fire season, with 1.26 million acres burned. The California Department of Forestry and Fire Protection (CALFIRE) suggests that wet weather generates an abundance of grass fuels that could burn easy and fast. If combined with a hot, dry summer, this fuel overgrowth can exacerbate the size, spread, and intensity of a wildfire.
This wet winter will help to improve very dry areas, but in terms of wildfire, all eyes will be on whether the California summer will recreate the same conditions seen in the last two summers – hot, dry and windy conditions that interact with a huge range of natural environments across the state, combined with the threat of ignition sources. This wet spell could just mean different fuel types will burn.
It was off to London’s Savoy Hotel for members of the RMS London team last Thursday, for the Eleventh Trading Risk Awards. And apart from the great hospitality, and the flowing conversation from colleagues and industry peers alike, RMS was also recognized by the award judges, receiving the “Initiative of the Year” award for the RMS U.S. Inland Flood HD model.
Without sounding like an Oscar acceptance speech, on behalf of the team that worked on the model, I would like to thank the judging panel made up of representatives from the media and the industry for selecting our entry. Released last October, the flood model is designed to help the private insurance market seize the opportunities presented by this peril, and to also ultimately help accelerate flood insurance take up in the U.S.
Ben Brookes, managing director – capital and resilience solutions, RMS, (pictured center) receives the “Initiative of the Year” award at the Trading Risk Awards 2019
In a country where hurricanes, tornados and wildfires can dominate the headlines, it is flood that is the most frequent and widespread peril in the U.S. Events range from small, localized flooding to widespread inundation impacting multiple river catchments and basins. The state-backed National Insurance Flood Program (NFIP) – recently extended until the end of September by Congress, dominates the flood insurance market, providing 95 percent of residential flood policies.
Even after significant flood events, such as from Hurricane Harvey in 2017, and Florence in 2018, NFIP policy numbers have recently plateaued; the New York Times reports that policies in force are below those a decade ago. In Midwest states, NFIP policies are down by a third since 2011, which has left many uninsured against this year’s ongoing flooding across the region. Flood is underinsured throughout much of the country, where only a third of homes in floodplains have insurance. And of the tens of trillions of dollars exposed to flood, still only a fraction is covered by the private market.
With FEMA looking to boost the number of households with flood insurance in the U.S from around five million now to eight million in 2022, what can be done to start to increase flood insurance penetration and to close this growing protection gap? How can private insurers enter the market with confidence and build a flood insurance business which will be profitable and sustainable in the long-term?
It is our belief that the insurance industry is currently inadequately served in terms of the accuracy and breadth of data available to achieve this task. As well as accessing accurate flood hazard data, this also extends to data on flood defenses, the first-floor height of a building or the presence of a basement – all key factors in assessing flood risk. There is also a need to use tools that can discern the high-gradient nature of flood extent and severity – and to accurately quantify probabilistic loss to exposures at risk.
We believe that the RMS U.S. Inland Flood HD Model does offer a comprehensive and well-validated view of flood risk throughout the contiguous U.S., which can help (re)insurers gain the necessary insights into the range of potential commercial opportunities associated with the private flood market. It captures the risk associated with all aspects of precipitation-induced flooding, including those resulting from tropical cyclone and non-tropical cyclone rainfall, while also accounting for factors that impact rainfall runoff (e.g., groundwater response, surface evapotranspiration, and snowmelt).
To capture flooding caused by tropical cyclones, the model is explicitly coupled to the same event set as the market-leading RMS North Atlantic Hurricane Model. Understanding flood risk and how it is correlated with wind exposure, is required for management of an overall book, risk tolerance and accumulations. And thus, it is particularly important to use a consistent view of risk across those aspects and across perils. By linking these models, it has enhanced the development of a truly complete and consistent view of the U.S. flood risk landscape – providing knowledge of how flood is spatially and temporally correlated across all its major sources, including storm surge and the wind peril.
Probabilistic modeling is essential, and the proprietary modeling methodology simulates over one million individual events, collectively representing 50,000 years of continuous precipitation, runoff, river discharge, and inundation within and across affected regions. These robust simulations provide a complete characterization of low- and high-severity flood events that could damage property, minimizing uncertainty to inform confident capital allocation, solvency assessments, and pricing based on model output. The model includes simulations of physically plausible flood events capable of causing losses far greater than have been observed historically, allowing (re)insurers to prepare for the potential financial impacts of the next flood catastrophe.
Using Innovative Modeling to Fill Critical Data Gaps
Flood hazard, vulnerability, and loss are extremely sensitive to building elevation and the presence of basements, which vary geographically across the U.S. When this data is not captured by the user, the model leverages proprietary inventory databases developed from extensive research to infer each building’s first floor height and basement likelihood. The explicit modeling of these two flood-specific characteristics, in addition to other general characteristics (e.g., construction class, occupancy, year built, etc.), helps reduce uncertainty in technical pricing with high-precision, per-location risk assessment.
Effective flood defenses also make a crucial difference when assessing flood risk. A major task of the RMS flood modeling team was to take disparate public levee data, which only accounts for a maximum of 20 percent of the nation’s flood defenses, together with the use of a proprietary stochastic modeling technique that accounts for the likely presence and standard of protection of defenses along the entire modeled river network.
This gives the option to see defended and undefended views of risk – to establish how the risk is reduced by a flood defense, and also allows users to customize these views, by adding their own defense information or adjusting the model’s default view. Allowing the market to quantify the sensitivities and impacts of various flood mitigation efforts and failure scenarios helps facilitate appropriate flood risk selection, pricing, and portfolio growth decisions throughout the U.S.
Gaining confidence and understanding around U.S. flood risk is a sound first step for the insurance industry to move forward and offer innovative coverages to meet the diverse needs of the market. And as the judging panel recognized, the U.S. Inland Flood Model represents real innovation to help achieve this.…
Dr. Holly Widen is a Product Manager in the Model Product Management team, focusing on the U.S. Flood suite of products. She joined RMS in 2016 upon completion of her Doctorate in Geography from Florida State University, where she studied tornado risk and vulnerability using applied spatial statistics. She has co-authored over ten peer-reviewed journal articles and is a member of the American Meteorological Society and the American Association of Geographers.