The History of Kinetic Analysis Corporation: Part 2

Welcome to Part II of the history of Kinetic Analysis Corporation (KAC). Part I covered the historical background leading to the formation of KAC and can be found here (https://www.kinanco.com/blog/the-history-of-kinetic-analysis-corporation-part-1).

Over the first few years after the creation of KAC, KAC would provide near real-time data on tropical cyclone hazards to companies such as DTN in Minnesota and Bloomberg in New York City. KAC also saw popular interest in rapid estimates of economic loss from extreme events such as tropical cyclones. For example, KAC’s loss numbers were cited by Bloomberg during extreme events such as Hurricane Sandy in 2012 [1]. However, our main focus was using the TAOS model to provide our clients with near real-time data on tropical cyclone hazards and helping clients assess their wind speed and storm surge risk by offering custom risk modeling services. For example, KAC was the original risk modeler for the Caribbean Catastrophe Risk Insurance Facility (CCRIF) and provided risk assessments and real-time data on tropical cyclones as well as earthquakes and extreme precipitation events.

            Throughout the 2010’s, KAC would go on to acquire clients such as the African Risk Capacity (ARC), a specialized agency of the African Union established to help African governments improve their capacities to plan, prepare, and respond to extreme weather events and natural disasters [2]. With record-breaking storms like Cyclone Freddy hitting Madagascar just this past spring [3], there is a continued need for disaster preparedness and an understanding of the natural hazards associated with these extreme events. For this reason, we have also worked with the Pacific Disaster Center (PDC) in Hawaii to provide them with timely, detailed information on the hazards associated with ongoing tropical cyclones. In fact, PDC recently quoted that the tropical cyclone data that they used was a “milestone achievement… [that] provided critical, life-saving information to aid rapid response.” KAC has also worked to provide data to government agencies such as the Foreign Agricultural Service of U.S. Department of Agriculture and several of the largest insurance/reinsurance brokers (for example, WTW). Recent storms like Hurricane Ida and Hurricane Ian are forcing the broader weather/climate risk communities to reevaluate our understanding of the natural hazards associated with tropical cyclones, and insurance companies are particularly interested in this information as natural disasters become more costly [4]. A sample of our valued clients is shown in Figure 1.

Figure 1: A sample of the clients that Kinetic Analysis Corporation has worked with over the years.

A recent example of how KAC has significantly aided clients in managing their risk and improving disaster response is our work with ARC. We recently generated a set of hazard layers and economic loss data for historical tropical cyclones occurring in the southwest Indian Ocean since 1980. We also created a 10,000-year stochastic set of tropical cyclone events in the same region [a stochastic set is a set of randomly determined events that can be analyzed statistically but may not be predicted precisely] [5].

For other clients we have generated thousands of updated, quality-controlled hazard data based on a storm’s position, intensity, size, and asymmetry using best-track data from Regional Specialized Meteorological Centers worldwide [6]. The hazard data include wind, waves, surge, and rain at varying spatial resolutions and in various data formats. These data have provided invaluable risk assessments on the threat posed by winds, storm surge, and rainfall for various locations around the globe and can be used to generate exceedance probability curves.

Tied into the concept of an exceedance probability curve is the idea of a return period. A return period is equivalent to the inverse of the annual probability of meeting or exceeding a threshold value of a hazard. For example, a 25-year return period for an event is equal to a 0.04 probability, or a 4% chance, of occurrence in a year. An exceedance probability curve can be constructed using a series of return period calculations.

Two examples of tropical cyclone wind speeds that are equaled or exceeded with a return period of 25 years are shown below (see Figure 2). The winds are more variable in the bottom half of the figure because fewer historical events are used in the calculation. However, we can generate different estimates using variable amounts of smoothing. 

Figure 2: 25-year return period map of wind speeds from tropical cyclones in two regions: (top) the Gulf of Mexico and western Atlantic and (bottom) the southwest Indian Ocean and southeastern coastline of Africa. The 25-year return period wind speeds shown in the top figure are based on the National Hurricane Center's best-track data for tropical cyclones that occurred from 1950 through 2021. The winds shown in the bottom figure are based on the Joint Typhoon Warning Center's best-track data for tropical cyclones that occurred from 1980 through 2021. The winds represent terrain-adjusted, 1-minute sustained winds at 10-meter elevation. Note that winds equal to or faster than the return period winds can occur more than once in a year, or in consecutive years.

We at Kinetic Analysis are constantly working hard to provide more powerful updates to both our modeling capabilities and our real-time data feed. To be one of the first to have access to our new customizable risk tool which can analyze your book of business in real-time during tropical cyclone events, reach out to us at aagastra@kinanco.com. This new tool allows anyone to determine the potential threat from tropical cyclone hazards. KAC will be expanding further on this tool soon to include European windstorms. A detailed description of our data offerings and the various plans are also available on our website at www.kinanco.com under the “Products” tab. Reach out now to get more information, before the next catastrophe strikes.

1.     https://www.bloomberg.com/news/articles/2012-10-29/hurricane-sandy-threatens-20-billion-in-u-s-economic-damage?embedded-checkout=true

2.     https://www.arc.int/

3.     https://www.reuters.com/world/africa/why-is-cyclone-freddy-record-breaking-storm-2023-03-14/

4.     https://www.cnbc.com/2023/08/30/how-climate-risk-disaster-era-are-changing-the-cost-of-home-insurance.html

5.     https://www.masterclass.com/articles/stochastic-meaning

6.     https://www.nhc.noaa.gov/aboutrsmc.shtml