CoreLogic Identifies U.S. States at Risk of Property Loss from Natural Hazards

CoreLogic, a global property information, analytics and data-enabled services provider, has released an analysis ranking Florida as the U.S. state with the highest level of comprehensive risk exposure to multiple natural hazards, with Michigan identified as the state with the lowest risk.

The analysis was derived from the new CoreLogic Hazard Risk Score (HRS), an analytics tool launched today that gathers data on multiple natural hazard risks and combines them into a single easy-to-use score ranging from 0 to 100. The overall score indicates risk exposure at the individual property and location level.

For every geocoded location across the U.S, the CoreLogic HRS is compiled using data representing nine natural hazards: flood, wildfire, tornado, storm surge, earthquake, straight-line wind, hurricane wind, hail and sinkhole. Locations with higher risk levels are exposed to multiple hazard risks and will, therefore, receive higher scores when the risk analysis is aggregated. Subsequently, locations with minimal risk levels have lower exposure and receive lower scores. Geocoded locations are generated at the property-address level using latitude and longitude coordinates and include both residential and commercial properties.

“Florida’s high level of risk is driven by the potential for hurricane winds and storm surge damage along its extensive Atlantic and Gulf coastline, as well as the added potential for sinkholes, flooding and wildfires. Michigan alternatively ranks low for most natural hazard risks, other than flooding,” said Dr. Howard Botts, vice president and chief scientist for CoreLogic Spatial Solutions.

The proprietary CoreLogic HRS is able to calculate risk based on a 10 x 10 meter grid, the lowest level of granularity available for the underlying hazard data. In calculating the overall score, both the probability of an event and the frequency of past events are significant contributing factors used to determine risk levels associated with individual hazards, as well as each distinct hazard’s risk contribution to total loss. The data is combined into an aggregated, consistent and normalized value that allows statistically valid combinations to be derived.

“In the past, natural hazards have been difficult to compare and combine in a meaningful way,” said Dr. Botts. “Hazard Risk Score is a single solution that measures risk concentration consistently and pinpoints the riskiest places in the U.S. with timely and granular accuracy. This insight is critical in conducting comparative risk management nationwide and fully understanding exposure to potential natural hazard damage.”

Insurers, risk managers and mortgage servicers can use CoreLogic Hazard Risk Score to improve decision-making and enhance a variety of business operations, including:

• Business continuity and disaster recovery planning
• Analyzing risk associated with a residential property or portfolios of properties
• Measuring mitigation savings vs. total hazard potential damage
• Evaluating and determining natural hazard risk levels of distribution and supplier networks
• Recognizing which underinsured or uninsured properties may become at risk of default
• Adverse selection avoidance and identification of “good risk” properties

U.S. Natural Hazard Risk by State* (Ranked by CoreLogic Hazard Risk Score)

Rank State HRS

1FL94.51

2RI79.67

3LA79.23

4CA75.56

5MA72.12

6KS69.51

7CT69.04

8OK66.82

9SC66.38

10DE65.38

11OR64.89

12NJ61.54

13IA61.02

14TX60.89

15NC59.72

16MO57.81

17DC57.33

18MS57.05

19AR56.7

20NH55.3

21ID52.75

22MD52.28

23CO51.88

24NE51.86

25IL51.8

26IN50.74

27GA50.58

28NV50.12

29AL49.42

30KY47.34

31TN46.48

32UT45.22

33NM43.76

34AZ42.81

35VA42.35

36WA42.3

37WI38.52

38SD38.24

39MT37.91

40MN36.42

41OH34.61

42ME31.64

43WY30.24

44PA28.79

45VT28.31

46ND27.5

47NY24.97

48WV20.67

49MI20.22

Source: CoreLogic 2014.

* AK and HI were excluded in the ranking due to limited natural hazard risk data.