Thursday, June 28, 2012

Florida Building Codes: Safe or Sound?

Uncertainty about the ability of a structure to withstand the impact of a hurricane will inevitably give rise to uncertainty about the availability of affordable coverage because all uncertainties trickle down to calculating the insurance industry specific catastrophe risk.  In a hurricane prone state with an economy entwined with the real estate market and the seemingly omnipotent building interest, both the ability of a structure to withstand storm winds and the cost of construction (recouped in the sale price) is of concern.  Hence, building codes (adjusted every 5 years) are a subject of great debate that at times, conflates science and politics.

A large portion of the destruction left by Hurricane Andrew was found to be a result of a failed building code system.  In turn the Florida legislature created the Florida Building Commission charged with creating the Florida Building Code.  The Commission is a 25 member group, all appointed by the Governor, representing the many facets of the Florida building industry.  Aside from being a straightforward set of regulations, the Code prioritizes value preferences for building structures, 
The Florida Building Code shall provide for flexibility to be exercised in a manner that meets minimum requirements, is affordable, does not inhibit competition, and promotes innovation and new technology. The Florida Building Code shall establish minimum standards primarily for public health and lifesafety, and secondarily for protection of property as appropriate.
This prioritization of values prompted a recent article in the Miami Herald urging readers not to mistake a structure built to code as being one that is resistant to strong hurricanes.  Indeed, the Code is a negotiated compromise among conflicting interests and based on the law certain interests get priority.

Ricardo Alvarez expert in Mitigation and Vulnerability suggests that the building codes are only the minimum legal requirements and that these are not necessarily the "best or strongest."  To mitigate storm impacts and protect public vulnerability, "We should be building code-plus."    

Within the last year, the Code was adjusted, reflecting a recalculation of potential wind loads in the state and thereby reducing Code requirements in state except in Dade and Broward counties where requirements were increased.  Jack Glenn from the Florida Home Builders Association argued that new science, including risk modeling, was used to support decisions in favor of prioritized interests that felt that the previous Code required "overbuilding"
Pressures have been lowered but we have done it because the science says we should.
Richard Olson an expert on disaster politics at FIU appeals to the first priority of the Code and uses fear to suggest that the concentration of building along the coasts is a threat to human welfare 
 I stand up in public all the time and say we're going to get our asses kicked. They say, 'You're trying to scare me.' I say, 'Well, yeah.'

Friday, June 8, 2012

Political Process of Negotiating Hurricane Risk

Several days ago, the South Carolina Post and Courier published an article by Tony Bratelme.  The article clearly describes the existing disagreement about the true measure of the hurricane risk at the heart of the windstorm insurance problem that several states are experiencing.  Bratelme's article demonstrates that characterizing the hurricane risk is a political process that rests on interpretation and valuation of science information.  In the end, the cost of insurance reflects the political risk that is created in the process of negotiating agreement about the hurricane risk.

The article follows the travels of a South Carolina resident who seeks to identify the "true" hurricane risk.  The resident eventually finds, of course, that there is no true hurricane risk.  There are any number of statistical measures of the risk and their is everyone's chosen valuation and importance of such analyses but, there is no one true risk measure.

Bratelme first presents a basic analysis of the historical record and then places a valuation on the numbers:
Since 1851, 30 hurricanes had spun within 50 miles of South Carolina. That was one about every five years, which seemed to be the definition of vulnerable.
As he digs deeper he decides that the data suggests that the risk is minimal but

that didn’t really say much about the long-term vulnerability of a particular house in Beaufort or Charleston.
So, he looked to the now common practice of catastrophe modeling.  Upon the Post and Courier's request, prominent tropical meteorologist Kerry Emanuel produced his own statistical analysis with models he uses in his company, WindRisk Tech LLC.  With Emanual's modeled risk in hand, Bratelme determined that the risk is lower than residents are led to believe,
It meant that the truly disastrous ones [hurricanes] were rare and certainly not the impending train wrecks that weather channels and emergency planners sometimes suggest are on the way.
To others however, the same data does indeed suggest an impending train wreck.  For insurance companies, severe hurricanes, although rare, can lead to economic ruin.  Experience with Hurricane Hugo in 1989 and Hurricane Andrew in 1992 heightened insurer perception of "catastrophe" risk.  Such shocks can have grave impacts on the larger socioeconomic system.  The concentration of wealth along coastlines is a concern for insurers even if the probability of loss is "low."

Methodology can incorporate additional risk perceptions in the characterization process.  Bratelme identifies one (of many) instances where this has occurred.  Emanuel and his colleague Michael E Mann, theorize that a lull in North Atlantic basin hurricane behavior and its recent heightened activity is due to pollution production.  Therefore, reflecting on pollution levels to calculate hurricane risk estimates to then calculate insurance premiums incorporates elements of environmental risk (ie. changes in pollution levels) into the price of the policy.  

In the process of writing his article, Bratelme identifies a new dimension of the hurricane risk that is developing.  There seems to be a growing feeling that the means of characterizing the hurricane risk through the use of catastrophe models is a threat (see here too).  Recently, the Massachusetts insurance regulator turned down requested rate hikes specifically citing the models as a reason for doing so. (But of course, such a decision influences insurers' fears of insolvency)

And so, Bratelme nicely shows that while there are many statistical evaluations of the probability and severity of loss, there is no one true hurricane risk.  Likewise, there is no right estimate of the risk.  There are instead, estimates that are better suited for some interests than others and model estimates can be used as tools to support one's chosen risk perspective.  The cost of windstorm insurance reflects a political risk that is created as a result of negotiating compromise between interests and their chosen risk estimates.

Tuesday, June 5, 2012

TV Hurricane Forecasters: Different but the same

The Miami Herald ran an article describing how S. Florida television meteorologists frame forecast information in an effort to elicit specific responses.  The article exemplifies how science information alone does not suggest action or demand a perception of risk.  Instead, interpreting the information as an indication of risk and determining a response requires placing the information into some context and constructing understanding.  Hence, the title of the article indicates that TV meteorologists charged with informing the public of upcoming weather also seek to tell the public what such information should mean to them, "Meteorologists tread line between informing, panicking viewers."  The Miami Herald journalist writes, "TV meteorologists spend a lot of time trying to find ways to make you take them seriously without jumping up onto anchor desks and screaming, 'You're all going to die!'"

But even still, that all will die is only one interpretation of the forecast information and may not align with prevalent risk perceptions.  Phil Ferro of Fox Channel 7 indicates that his goal is to make people react to his information by buying provisions.  "I'll be on TV ad nauseum telling everybody to get ready, yet so many folks will always wait till the last minute to react.  That's what I always work on, how to get people to react, and to stock up on food and water. That's the magic pill I look for every year."

But, buying water is not the only action that is sought.  Television personalities are also charged with growing and maintaining viewership and are therefore competing with the other information venues.  To make their information seem better, TV meteorologists seek to give the impression that their channel has more and better information than another source.  Ferro states that the greatest competition is not other channels, "its your smart phone....One of the ways we combat that is to be very visual, to provide pictures and graphics that just won't work on a cellphone."  

Although the means of communicating the information abounds in graphics, television personalities, and media, the information itself is usually, if not always, consistent with that produced by the NHC.  That is, it is all the same information.  Does the variety of communication tactics create the impression that their is more information than actually exists? Indeed, some graphics may give the impression of less uncertainty than others.  In turn, it is important to study how people understand graphical information as it is not always as one would think.  Often, they interpret less uncertainty in some graphics and more in others even when each image is intended to communicate the same exact information and level of uncertainty.

In 2007, I published an article on this very topic and found that the public often misinterprets hurricane probabilistic information.