A methodology for the disaggregation of generic hurricane vulnerability curves for insurance loss estimation

Hurricane Vulnerability Curves represent the relationship between wind speed and consequent building damage. The insurance industry uses these curves for calculating the overall economic loss to its insurance exposure in a Hurricane. Analysis of actuarial data from insurance companies is currently the main building block in the development of vulnerability functions. The loss data available from insurance companies following a natural disaster is generally comprised of losses for a wide variety of building mixes, all aggregated together. Analysis of aggregate data does not go beyond the development of generic vulnerability curves for a combined portfolio. Such a generic curve gives no idea of the vulnerability of the individual building types represented by this curve. The paper presents a methodology for the disaggregation of a generic vulnerability curve into vulnerability curves that represent individual building types. The methodology provides a convenient way of translating known vulnerabilities for a region to those for another region by combining them with actuarial data and building inventory information of the region. The methodology is applied for the disaggregation of generic vulnerability curves for the Caribbean island of Puerto Rico. The Hurricane hazards and the consequent property losses in the region are also discussed.