It already seems like 2023 is long ago, but the consequences of natural disasters and the lessons we’ve learned from them are far from the past.

Record-breaking hailstorms; devastating wildfires in Lahaina, Hawaii; and other catastrophic events made global headlines, and for good reason. Historical patterns are changing – just look at the increasing rapid intensification of storms and sea-surface temperatures. However, changing climate patterns do not mean that there is no way to ensure resilience.

Research, property data, stringent building codes, and a commitment to preparedness are all lessons that insurers and homeowners can glean from 2023 to get ready to mitigate property risk for the 2024 season.

In this episode, host Maiclaire Bolton Smith and CoreLogic Director of Catastrophe Response Jon Schneyer look into what happened in the world of natural catastrophes in 2023. They also examine what we can learn from these events to give listeners a deeper understanding of the complex interplay between weather phenomena, human settlement patterns, and disaster response strategies.

In This Episode

1:34 – What is the biggest natural catastrophe story from 2023, and why was it record-setting?

4:04 – Looking into how population growth centers are increasing hail damage costs.

6:20 – What dominated international headlines for natural catastrophes – it wasn’t hurricanes.

8:52 – Erika Stanley goes over the numbers in the housing market in the Sip.

10:12 – How did El Niño and sea surface temperatures interact to influence hurricane season 2023?

13:35 – Wildfires in California were tempered, but will this continue in 2024?

16:17 – Why were the wildfires in Maui so devastating?

18:45 – What can we learn from these devastating natural catastrophes? (Hint: Building codes are important.)

21:42 – Erika Stanley discusses current natural catastrophe events.

Links:

• Hazard HQ Command Central
• Read CoreLogic Intelligence

Up Next: Are Insurers Prepared for an El Niño-Fueled Hurricane Season?

Find full episodes with all our guests in our podcast archive here: https://clgx.co/3HFslXD4 Copyright 2024 CoreLogic

Jon Schneyer:

Maiclaire Bolton Smith:

Welcome back to Core Conversations: A CoreLogic Podcast, where we tour the property market to investigate how economics, climate change, governmental policies and technology affect everyday life. I am your host Maiclaire Bolton Smith, and I'm just as curious as you are about everything that happens in our industry.

Whether you like it or not, weather is something that affects us all and not just the kind of weather that comes up in daily small talk like an unexpected rainstorm or the occasional uncomfortable warm day. We are talking about major natural disasters like hurricanes, severe convective storms, and wildfires. So how does this kind of weather affect insurers, the property market, and really anyone who is subjected to the whims of Mother Nature?

JS:

Thank you so much for having me back. It's a pleasure to be here.

MBS:

JS:

MBS:

Yeah.

JS:

Hail was obviously the big one, but we can't rule out straight-line winds, tornadoes also did a ton of damage across the country. This wasn't your typical tornado alley or hail alley in the plains or in parts of the Southeast. It was almost a countrywide phenomenon.

MBS:

Wow.

JS:

And to the point where hail, wind, tornado damage, if you summed up all those losses, those insured losses over the year, it's rivaling that of a major hurricane, a single major hurricane, like a Hurricane Ian kind of event and the $50 billion, $60 billion. And that's something that we haven't actually seen to-date. That's a brand new record.

MBS:

Wow.

JS:

And there's a couple of factors. First and foremost, it was an incredibly active hail season, more so than in the historical record. Through the end of October, there were 144 days with large hail. By large hail, I mean hail greater than 2 inches. And that's large enough to do significant damage to your roof, either enough where you're going to have to replace it entirely or do some pretty major repairs.

MBS:

Okay. Okay.

JS:

MBS:

Significantly more active.

JS:

Way more active. So active is obviously bad, right? There's more hail, there's better chance for damage, but generally speaking, hail is going to fall in areas where there's no property. But we had that intersection of a lot of hail and a lot of property getting hit and major cities like the Dallas-Fort Worth, Austin area in Texas were hit particularly bad causing quite a bit of damage.

Erika Stanley:

Before we get too far into this conversation, I wanted to remind our listeners that we want to help you keep pace with the property market. To make it easy, we curate the latest insight and analysis for you on all of our social media where you can find us using the handle @CoreLogic on Facebook and LinkedIn or @CoreLogicInc on X, formerly known as Twitter, and Instagram. But now let's get back to Maiclaire and Jon.

MBS:

Okay, so there's a couple of things there. So first of all, you said anything greater, 2 inches doesn't look that big, but when you're talking about pellets of ice flying at you, it can cause quite a lot of damage. So I know that it really was a big year for that. So one thing I did want to clarify a little bit because you sort of got into this is that the increased frequency versus increased severity, so there were more bigger hailstorms, but there also were just more hailstorms in general, bigger hail falling in those hailstorms and hail falling in regions that are actually populated versus just in the middle of nowhere.

JS:

Exactly. And actually to your point there, hitting more populated centers. A lot of research we've done here at CoreLogic is sort of the change in where people are moving to and building homes, and that's another one of these issues where people are moving to areas like Texas and the Southeast, warmer climates, more space, a cheaper cost of living relative to New York City or LA or any of the big cities. People had to live there because they had to go into the office. But in this work-from-home world we live in, people can move elsewhere and do what makes it easier.

So these areas that were hit pretty hard with hail this year are areas where people are building homes, bigger homes, more expensive homes, and on top of that, the cost to repair any of this damage is going up. Those inflationary pressures on materials and labor are really driving up individual claims. What might've been a $5,000, $6,000 roof repair 10 years ago could be twice that now. So that is really going to inflate those insured losses in the end.

MBS:

Yeah. And that really just follows up on how we started this season. We talked with our chief economist about pandemic migration and how people were moving out of these bigger coastal cities into these more into the Midwest and plains regions and building these very large homes. So it's all related, and we touched too. Yeah.

JS:

It's that intersection of hazard and property that's kind of what we always look at. That's exactly what it is. Now that there's more property, more exposure, these areas that have always been hit by hail, but there hasn't been much there before, well, now there's a lot there.

MBS:

ES:

JS:

Yeah. So going back to February, March and the international scene was dominated by Turkey earthquakes. The devastating earthquakes that affected Southern Turkey and Northern Syria caused insurmountable damage in those areas. Buildings, cities were completely leveled. In Europe, mainland Europe, we had a number of winter storms starting in November. We had a Babet and Ciarán, two pretty nasty winter storms, but that was a very wet storm, a lot of flooding in northern U.K. And Ciarán was an incredibly strong wind event, actually set some meteorological records on its way through sort of southern U.K. and then that sort of northwestern France and then into, up the channel. Fortunately, that storm missed, the strongest winds missed the major population centers. So what could have been a record windstorm loss in the U.K. and Europe ended up being a close miss, which that's a great thing.

MBS:

Yeah, for sure.

JS:

So on the international scene, those are probably the biggest stories. It's not that we didn't have hurricanes this year, we just were really fortunate. It's a game of probability. We actually had a pretty active hurricane season, actually one of the... In terms of named storms, it was the fourth-highest number of named storms in a year.

MBS:

Wow.

JS:

MBS:

Yeah, I guess time will tell.

ES:

Before Jon and Maiclaire continue the conversation about natural catastrophes, it's that time again. Grab a cup of coffee or your favorite beverage, we're going to do the numbers in the housing market. Here's what you need to know.

MBS:

JS:

MBS:

A royal rumble.

JS:

A royal rumble between sea surface temperatures and El Niño in the North Atlantic Ocean. So we moved from a couple years of La Niña conditions to El Niño, and one of the global teleconnections associated with El Niño is it can sort of fight hurricane development in the North Atlantic.

MBS:

Okay.

JS:

So you sort of have these wind conditions trying to make it more difficult for hurricanes to form and intensify. On the other hand, as you said, we had record warm sea surface temperatures in the Atlantic and in the Gulf of Mexico and in the Caribbean, and hurricanes need warm sea surface temperatures and ocean heat content to form, to strengthen, rapidly intensify. So like I said, we had this battle of these two phenomena.

And throughout the entire season the conversation was which one's going to win? And in the end it does kind of look like sea surface temperatures won out.

MBS:

Interesting.

JS:

It was pretty hot and it was a pretty active season. It just came down to probability that one didn't happen to hit the coastline, which is not to say that the effects of El Niño weren't observed. There were a number of hurricanes that were trying to strengthen, but were cut off because of we get a lot more extra wind shear from El Niño and that kind of keeps hurricane from forming.

MBS:

Interesting.

JS:

MBS:

JS:

MBS:

Yeah.

JS:

You know. You were there in California. You were there for them.

MBS:

Yeah, I remember. It rained like crazy.

JS:

It rained, it rained like crazy, and it rained for months on end. So that's really good for wildfire suppression, right? There's a lot more soil moisture and plant moisture.

So the trade-off there is unfortunately, if it's going to rain a lot, plants like rain and they're going to grow. So what is, I'm not going to say expected, but what people are concerned about is that with all that rainfall, we'll have a lot more plant growth and once it does start to dry out, assuming as I said, we'll cycle between really rainy years and really dry years, once we get back into those drier years or drier time of the years, well, then there's a lot more fuel on the ground for fires to burn. So that is kind of the concern. While all the atmospheric rivers and all the rainfall we had this year were great for suppressing wildfires, it could be building up the fuel load for future years. So California and the Southwest in general could be in trouble a couple years down the road when it starts to dry out.

MBS:

Yeah. And I mean we've all seen the cycle here in California with the excessive droughts, which have led to extreme wildfires. And now that is exactly what we're hearing is with all this rain, we're getting all this new fuel growth.

So we touched on it just briefly, but if we kind of jump over to Hawaii and what happened in Lahaina, can you talk a little bit about that devastating fire that happened last year?

JS:

Yes. The wildfires in Lahaina were truly tragic, one of the most devastating deadly wildfires in U.S. history, maybe world history. There was a collection of number of factors that made that wildfire, that incident so bad. So while it was somewhat dry, it wasn't persistent drought conditions, but a lot of these grasslands that surround Lahaina kind of to the northeast, as you go towards the mountains, these grassy areas, they can dry out a lot quicker than trees and large plants. So they dried out in just moderate or even light-dry conditions.

MBS:

Yeah.

JS:

And we had a lot of wind. So, Hurricane Dora was in the Pacific Ocean several hundred miles southwest of Hawaii, but that low-pressure center in the center of a hurricane was one half of a gradient. To the northeast of the islands, we had a high-pressure center. When you have a high- and low-pressure center, you get winds moving from high to low. So that was blowing from the northeast down the slopes of the mountains in Maui towards Lahaina, and all you needed was a spark. So once there was a spark, those grasses could catch on fire. The winds were pushing flames and embers towards Lahaina. And then once the flames and embers got to the city, the wildfire could start spreading incredibly rapidly through the town.

A lot of the common building construction practices that we could observe, a lot of wood-frame construction or siding, a lot of porches with lattices and open space beneath them, a lot of built-in ventilation systems because it's typically very warm and humid there, these are really great for trapping embers. So that was probably one of the reasons it helped spread so quickly. And then the buildings themselves became the fuel for the fire. They were really hot. Buildings were built really close to each other, flames could jump from house to house. And that's why it was able to spread so rapidly through the town and why people had very little time or warning to evacuate and what made it such a devastating event.

MBS:

Yeah, just devastating and really one of the top devastating hazard moments of the year.

JS:

Definitely. Absolutely.

MBS:

So if we take a look back at some of those big losses of the year, you mentioned the Turkey earthquake. We talked a little bit about Hurricane Idalia. We've got the Lahaina fire. When we look at all of these events, what can we learn from these events? I don't just want to just talk about how bad they were. What can we learn from events like this?

JS:

MBS:

Okay.

JS:

So we are, not just we in the U.S., across the globe in areas that are prone to particular disasters, make a lot of effort to strengthen building codes, whether that be for ground shaking against earthquakes or wind design speeds for hurricanes. So these building codes are well-studied and implemented.

One of the issues has to come down to enforcement.

MBS:

Of course.

JS:

So if building code enforcement isn't widespread, then you'll have entire buildings collapsing. That's what we saw during Turkey. Some of the issues had to do with the building code enforcement or some building practices that weren't necessarily up to code. And that's why you had such widespread devastation.

MBS:

Yeah.

JS:

MBS:

Explosive.

JS:

... explosive rapid intensification, incredible to the point where it wasn't captured in the forecast models and it caught everyone off guard there in Acapulco. Emergency management, any personnel people on the ground were caught off guard.

So I know there's a lot of research going into being better at modeling rapid intensification just for emergency preparedness, but we also into our models we're developing here at CoreLogic, it's a concept that we'll have to study and implement better because it seems to becoming a much more common occurrence.

MBS:

Sure, yeah. I think the one thing that we know about natural catastrophes is there's a lot we don't know. And we've learned so much from every event that does happen. And from our perspective is we build those new findings into our models and into our data so that we can capture them better to better represent them.

ES:

Before we end this episode, let's take a break and talk about what's currently happening in the world of natural disasters. CoreLogic's Hazard HQ Command Central reports on natural catastrophes and extreme weather events across the world. A link to their coverage is in the show notes.

2024 began with a shallow magnitude 7.5 earthquake hitting western Japan on January 1. CoreLogic estimates that insured losses in Japan due to damage from ground shaking, fires following, tsunamis and liquefaction could be between $1 and $5 billion. Initial Japanese reports indicate material damage in the smaller towns and cities nearby the Noto Peninsula, such as Wajima and Suzu. The mayor of Suzu said that over 90% of the 5,000 homes in the city may have been damaged or destroyed. However, the earthquake spared major economic centers, like Tokyo, reducing the loss potential from this event.

Then on January 8, multiple tornadoes formed along the Florida panhandle causing significant damage and disruption to homes and businesses. CoreLogic Hazard HQ Command Central estimated that 26,617 single- and multifamily homes were potentially impacted by tornadic winds in Florida, southeastern Alabama, and southwestern Georgia. Then in mid-January, an Arctic blast swept across the U.S. setting record low temperatures.

MBS:

JS:

Well, I always invite people to go to our website, hazardhq.com. That's where we keep up to date on all natural disaster activity across the globe. We'll provide our event summaries and if there's any losses or data we can provide from CoreLogic's treasure trove of data, that's where it'll be. Like you said, I'll be back on. Anytime there's a big earthquake or a big hurricane, I'll be back to talk about it on the podcast.

MBS:

Well, we look forward to having you back, John. Thank you so much for joining me today on Core Conversations: A CoreLogic Podcast.

JS:

Of course. Thank you for having me.

MBS:

All right. And thank you so much for listening. I hope you've enjoyed our latest episode. Please remember to leave us a review and let us know your thoughts, and subscribe wherever you get your podcasts to be notified when new episodes are released. And thanks to the team for helping bring this podcast to life, producer Jessi Devenyns; editor and sound engineer, Romie Aromin' our facts guru, Erika Stanley; and social media duo, Sarah Buck and Makaila Brooks. Tune in next time for another Core Conversation.

ES:

You still there? Well, thanks for sticking around. Are you curious to know a little bit more about our guest today? Well Jon Schneyer is the Director of Catastrophe Response here at CoreLogic. Jon aims to keep CoreLogic clients informed of weather risks by monitoring potential events, determining the scope of the response, coordinating with internal stakeholders and providing up-to-date content. You can read more of his event response coverage on hazardhq.com. The link is in the show notes!