An Integrated Scenario Ensemble-Based Framework for Hurricane Evacuation Modeling: Part 1-Decision Support System.

This article introduces a new integrated scenario-based evacuation (ISE) framework to support hurricane evacuation decision making. It explicitly captures the dynamics, uncertainty, and human-natural system interactions that are fundamental to the challenge of hurricane evacuation, but have not been fully captured in previous formal evacuation models. The hazard is represented with an ensemble of probabilistic scenarios, population behavior with a dynamic decision model, and traffic with a dynamic user equilibrium model. The components are integrated in a multistage stochastic programming model that minimizes risk and travel times to provide a tree of evacuation order recommendations and an evaluation of the risk and travel time performance for that solution. The ISE framework recommendations offer an advance in the state of the art because they: (1) are based on an integrated hazard assessment (designed to ultimately include inland flooding), (2) explicitly balance the sometimes competing objectives of minimizing risk and minimizing travel time, (3) offer a well-hedged solution that is robust under the range of ways the hurricane might evolve, and (4) leverage the substantial value of increasing information (or decreasing degree of uncertainty) over the course of a hurricane event. A case study for Hurricane Isabel (2003) in eastern North Carolina is presented to demonstrate how the framework is applied, the type of results it can provide, and how it compares to available methods of a single scenario deterministic analysis and a two-stage stochastic program.

Modeling insurer-homeowner interactions in managing natural disaster risk.

The current system for managing natural disaster risk in the United States is problematic for both homeowners and insurers. Homeowners are often uninsured or underinsured against natural disaster losses, and typically do not invest in retrofits that can reduce losses. Insurers often do not want to insure against these losses, which are some of their biggest exposures and can cause an undesirably high chance of insolvency. There is a need to design an improved system that acknowledges the different perspectives of the stakeholders. In this article, we introduce a new modeling framework to help understand and manage the insurer's role in catastrophe risk management. The framework includes a new game-theoretic optimization model of insurer decisions that interacts with a utility-based homeowner decision model and is integrated with a regional catastrophe loss estimation model. Reinsurer and government roles are represented as bounds on the insurer-insured interactions. We demonstrate the model for a full-scale case study for hurricane risk to residential buildings in eastern North Carolina; present the results from the perspectives of all stakeholders-primary insurers, homeowners (insured and uninsured), and reinsurers; and examine the effect of key parameters on the results.