Weathering the Storm: A Behind-the-Scenes Look at the Insurance Institute for Business & Home Safety

(DESCRIPTION) 
Text, Wednesdays with Woodward (registered trademark). A webinar series. Weathering the Storm: A Behind-the-Scenes Look at the Insurance Institute for Business & Home Safety. Logos, Insurance Institute for Business & Home Safety, Travelers Institute, Travelers, American Property Casualty Insurance Association, Insuring America, a.p.c.i. dot org. 2020-12-02, 13:00:15. Joan Woodward in a picture-in-picture in the upper right corner. 

(SPEECH) 
Hello, good afternoon, and thank you for joining today's program. My name is Joan Woodward and I have the honor of leading the Travelers Institute, which is the public policy division and educational informational arm of Traveler's Insurance. 

Today we are continuing our Wednesdays with Woodward webinar series, exploring issues impacting us both in our professional and personal lives. We have hosted these programs since the beginning of the summer, and we have welcomed expert guests from various industries to bring you content you can use in your daily lives. So we are excited to continue our series today with the support of the Insurance Institute for Business and Home Safety and the American Property Casualty Insurance Association. 

We're glad you're here today and we hope you'll stay in touch with us so join our mailing list. We have a terrific program starting back up in January with some terrific speakers. You can email us-- institute@travelers.com--or you connect directly with me on LinkedIn, if you would like. You can also go in and watch our replays of past webinars on our website--travelersinstitute.org. 

So before we begin, I'd like to take a moment to draw your attention to the disclaimer on your screen. 

(DESCRIPTION) 
Text, About Travelers Institute (Registered Trademark) Webinars, Wednesdays with Woodward is an educational webinar series presented by the Travelers Institute, the public policy division of Travelers. This program is offered for informational and educational purposes only. You should consult with your financial, legal, insurance or other advisors about any practices suggested by this program. Please note that this session is being recorded and may be used as Travelers deems appropriate. 

(SPEECH) 
Today we have the opportunity to celebrate the 10th anniversary of the Insurance Institute for Business and Home Safety, or IBHS, and the Research Center. IBHS is a research institution dedicated to strengthening homes and businesses, preventing avoidable suffering, and promoting more resilient communities. At their state-of-the-art research facility--which I visited about 10 years ago--they build model homes and businesses to withstand category three hurricane winds, major hailstorms, and wildfires by replicating these conditions internally and testing different building materials and methods. 

Travelers has been thrilled to support IBHS for over 20 years and to be the co-founding member of the IBHS Research Center. Their cutting-edge research allows the insurance industry to help customers and communities identify, reduce, and manage risk. In fact, Travelers' own Eric Nelson--one of our speakers today-- currently serves as Chairman of the Board at IBHS to provide oversight and guidance to their research organization. So we are here today to learn from some of IBHS' most impactful work over the past decade. We have a packed program for you today and I'm thrilled to be able to join by three individuals who have been instrumental in making IBHS what it is today. 

(DESCRIPTION) 
Speakers. Photos of four speakers, including Joan Woodward, EVP, Public Policy & President, Travelers Institute, MODERATOR. Other three are introduced. 

(SPEECH) 
First, we have Roy Wright. He is the President and CEO IBHS. Roy has more than 20 years of experience in insurance, risk management, mitigation, and resilience planning. He joined the IBHS from FEMA--the Federal Emergency Management Agency-- where he served as the Chief Executive of the National Flood Insurance Program. He led the agency's Federal Insurance and Mitigation Administration and directed resilience programs addressing earthquake, fire, flood, and wind risks. 

Also, today we have Debra Ballen. Debra is the General Counsel and Chief Risk Officer at IBHS. In addition to overseeing all legal matters, Debra leads important public policy initiatives, including adaptation, community resilience, and economic incentives for mitigation. 

Then we have Eric Nelson, who is Senior Vice President of Enterprise Catastrophe Risk Management at Travelers and also, as I said, Chairman of the Board at IBHS. Eric leads the team at Travelers responsible for evaluating risk and developing pricing and underwriting strategies related to catastrophes. 

We're excited to have you all here today and looking forward to your insights. So for the audience out there-- we have a very strong attendance today. We're thrilled to have you all--a quick note about submitting your personal questions. We'll save time at the end of our program for your questions, but don't wait to submit them. So get them in by submitting them using the Q&A function, which is if you hover at the bottom of your screen there, if you hover over a Q&A and you click on that, you can type in your question. If you don't want me to read your name, do it anonymously. There's the box to check for that. 

So with that, please join me in welcoming Roy Wright. Roy. 

(DESCRIPTION) 
Video play screen with a house. Play button is clicked and flames come up from the bottom of the house. Logo, Insurance Institute for Business & Home Safety. I.B.H.S., Wildfire Research. Cutaway to a CNN news clip. Headline, Developing Story, Deadly Wildfires Ravage U.S. West Coast. Logo, Live CNN 

(SPEECH) 
[VIDEO PLAYBACK] 

All right. Joining us now is Roy Wright. He is a former FEMA official and disaster safety expert. 

[MUSIC PLAYING] 

(DESCRIPTION) 
Roy Wright. Cutaway to a montage of different fire images: sparks fly into a structure. Images of a house on fire and firefighters with hoses. A firefighter looks forward as criss-crossed piping burns, images of burned property. Flames shoot horizontally as image moves to a pole light at night. The shooting flames flow around an object and toward the polelight. A cylindrical machine operates. Pipes in a large building shoot flames at a model house covered with boards, then diminish. 

A man stands outside a house on a patio. 

(SPEECH) 
While big flames are scary, embers are the most important cause of home ignition. 

(DESCRIPTION) 
From above, embers fly from the pipes toward the model house. Text, Wildfire Fence Research. I.B.H.S. and the National Institute of Standards and Technology (NIST) conducted wind-blown ember research on the vulnerability of fencing at the I.B.H.S. Research Center. 

Embers fly at a wooden fence. Text, Research Finding, Ignition occurred at Fence Component connections. 

Flames shoot out horizontally from the criss-crossed pipes. 

Flames burn from the corner of the model house as a counter in the corner counts seconds. The video moves into time lapse. At 44 seconds the side of the house is in flames. It changes back to real time as the flames continue on the side and along the bottom of the front of the house. From above, a house next to a canyon with houses on the other side. 

(SPEECH) 
Do something to make it safer, and it's not just for you. The fact that our house was safer made our neighbor's house safer. 

(DESCRIPTION) 
A man with a mask on and a CALl FIRE arm patch looks out at a burn scene as another man writes on a clipboard. 

(SPEECH) 
It also--we can tell that the firefighters were all over our yard protecting it so in the end, they're the angels in the process. But if you can make their job a little easier by causing the fire to take longer to get to your house, then it's a win-win for everybody. 

[END PLAYBACK] 

(DESCRIPTION) 
Logo, Insurance Institute for Business & Home Safety. I.B.H.S., Wildfire Research. In the background, the house burns from the corner and bottom. 

(SPEECH) 
So as we look at this, we start with this and we'll have a few these little video snippets that we'll take you through during this hour. In ways that are comparable to the Insurance Institute for Highway Safety, we, at IBHS, we crashed test structures, buildings. We do that against wildfire, hail, rain, and wind. 

We're starting today with this wildfire side and wildfire--for those of you who are from the West, you know this well--really works in three concentric circles. There's the ecosystem, and then there's the neighborhood, and then there's the individual structure and those two center elements that we focus on at IBHS. We have the only ability anywhere in this country where full-size structures can be built and then subjected to wildfire embers. 

We saw a pretty famous weatherman there talking in that piece about that because those embers, which can be the size of a spark when you're roasting a marshmallow, but are often, the size of your thumbnail or thumb, they can be the size of the palm of your hand, as well. And they regularly pick up and loft for up to a half mile and then, they can burrow in and smolder six, eight, 10 hours before they ignite. 

And so does this work that we do in support of the insurance industry, yes, but also for the public and to policymakers. As is the case in all of our research, it's about what kind of action can we get? 

This past year, we published the Suburban Wildfire Adaptation Roadmaps that look at the very specific things that can go on in a residential community to change how wildfire will attack and the kind of damage that it can cause for the insurance industry, for the public, and for policymakers. We collaborate with the Departments of Insurance and the NAIC and take these elements and help to move them forward. 

Now, so much that we're looking at today focuses on what goes on at our unique facility just south of Charlotte, in South Carolina, but it has to be done in tandem with work that goes on in the field. And hail is one of those spaces where we work this in tandem. 

(DESCRIPTION) 
Logo, Insurance Institute for Business & Home Safety. I.B.H.S., Hail Research. Background video of hail as it falls on a small device in a field. 

(SPEECH) 
[VIDEO PLAYBACK] 

[MUSIC PLAYING] 

Wow. 

It's a big guy. 

(DESCRIPTION) 
A golf ball size piece of hail is dropped from a machine and rolls down a chute. A woman picks it up and hands it to a man. 

(SPEECH) 
This would do some damage. 

Definitely. That one would come in about 70 to 75 miles as hour so that one would definitely do some damage to most roof systems. 

And forget about your roof, what about your car? 

Your car would definitely have a lot of dents from that guy, too. 

(DESCRIPTION) 
A car hood with many dents. A man stands outside against a dark background with dark blue clouds above. 

(SPEECH) 
We're outside of Nash, Oklahoma, just finished our deployment. We're picking up our disdrometers. 

(DESCRIPTION) 
Dark clouds move over a field in time lapse. Balls of hail shoot from a machine onto a metal sheet. A weathercaster next to an image of large hail and pieces on a roof. 

(SPEECH) 
Brings high winds, heavy rain, and sometimes hail. That means your roof could be at risk. 

(DESCRIPTION) 
A person turns a small device on a table illuminated by a red light. A man picks up hail from a field and displays three balls of it that fill his hand. 

(SPEECH) 
Hail coverage and size can change very, very quickly and that's something we're out here to do. That's what we're trying to map with our impact disdrometer. 

(DESCRIPTION) 
A man gets out of a van. In time lapse, he sets up a device in a field, then runs back to the van. 

Hail falls on the roof of a model house inside a large facility. From above, each side of the roof has a different surface. 

Storm clouds and lightning pass over a field. A machine in a lab with several shoots that come out. Hail falls on the device in the field. 

Hail falls against the camera lens. 

A woman in a lab holds a square on roof shingles under beams of light. 

She looks at a computer monitor to her side as she works. Balls of hail shoot through two inverted triangles and hit a sheet of roof tiles and shatter and spray. From above, tubes shoot hail onto the roof of a model house in the large facility. A man runs into a field and places a device. 

A ball of hail bounces off a roof tile on a vertical board. A vertical sheet of tiles with circles and x's drawn on some. A circle around a mark on a tile. A tube shoots a ball of hail onto a vertical tiled sheet and a red laser point remains where it hit. The tube shoots a ball of hail onto the sheet with circles and x's. A hand holds a tape measure against black marks on tiles. Logo, Insurance Institute for Business & Home Safety. I.B.H.S., Hail Research. 

(SPEECH) 
[END PLAYBACK] 

This work on hail really hits that sweet spot of, where do we see the work that has to happen in the lab, as well as the field? You know, hail, unlike wildfire and wind and flood and some of these others, it's not life-threatening. Yet, that doesn't mean it doesn't cause incredible damage, it just narrows who's interested in it. Prior to IBHS taking up this hail work over the last decade, the last published piece in the academic journals about the qualities of hail and how it played out was published in the 1960s. 

Now the insurance industry clearly has an interest in this--how it attacks roofs and the work that it plays. Hail, when it comes, it comes in three different forms. It can slush, it can splatter, or it can bounce. It comes in different sizes. It comes in different characteristics geographically across the country. But in these cases, when we do the work in the field to understand the quality of hail and then we can synthetically recreate it in the lab, it allows us to move towards action to create a different environment. 

So we publish and work with the asphalt roofing manufacturers, really nudging them towards improving their products so that they are more resilient and can withstand the way that Mother Nature continues to come their way. And every one of these elements, as we do our work at IBHS, it is ours to find ways by which this understanding about how the structures can perform in our test facility will then change the environment so that homeowners and businesses can be more resilient. 

So with that, I'm going to turn to my colleague, Debra Ballen. She's going to dive into this commercial element, but a quick video way to understand some of that work on the commercial front, first. 

(DESCRIPTION) 
Logo, Insurance Institute for Business & Home Safety. I.B.H.S., Commercial Research. Background image of a large commercial building. A portable room-size container on a wheeled bed. Inside a large structure, debris flies. Lumber inside a windowed structure. An AC unit set against wood below a window. Water drips from the underside of a unit set into a wooden structure. Two cement buildings side by side, one labeled "common" and the other labeled "stronger." A projectile flies in the window of the common one and the windows in both shatter. The roof covering on the common one blows up at the edges and the stronger one stays flat. The wall blows out on the side of a building and debris flies. From above, the two buildings on a round platform shake, and the side of one blow out and the roof's edges blow upwards. Furniture inside upended with debris on it next to the blown-out wall. A man stands on a balcony with a clipboard and a travel mug. Chris Cioffi, I.B.H.S., Commercial Line Engineer. He reaches out and moves a rod. He stands in an office. 

(SPEECH) 
[VIDEO PLAYBACK] 

[MUSIC PLAYING] 

It really takes into account, the most vulnerable parts of your building and it really brings it to the next level. 

(DESCRIPTION) 
Bill Bennett, The Lodge at Gulf State Park 

(SPEECH) 
I guess, the true testament is when you have two crews here from The Weather Channel. That's all they do is follow hurricanes. And I received testimonials from The Weather Channel indicating that not for a moment did they ever fear for any type of injury or any type of issues and were absolutely amazed at how the building performed. 

(DESCRIPTION) 
A room-size portable container is moved into a large facility. People move around in time lapse. Several people, one on a ladder, raise a sign onto the container that says Hannah's Lawn Care. 

A man with a Staff shirt works with wires. From above, the container is in the large facility on a round plate. Vertical objects move on the lower portion of the screen and the roof material shimmies. Logo, Insurance Institute for Business & Home Safety. I.B.H.S., Commercial Research. 

(SPEECH) 
[END PLAYBACK] 

Thank you, Roy, for running that video and thank you, Joan, and thank you, Eric. 

Today I'm really privileged to be talking about what we call our commercial storyline. Another way to say it, it's the B for business in IBHS. And before I do that, very quickly I would like to make a shout out to Jim Augustine of Travelers, who actually chairs our commercial lines committee. This is the committee that has really provided inspiration for us and a lot of technical assistance as we have grown our commercial research and products since we built the Research Center 10 years ago for IBHS. 

So the clips that you saw take you from the research, including one of our very early commercial research projects, to our real world impact, which you saw in terms of The Lodge at Gulf State Park. I'm going to touch on that in just a minute, but this is really what IBHS is all about. Taking the research in that great facility that we're taking you into today and turning it into the real world impact that affects homeowners and business owners-- business owners in terms of what I'm talking about, but I think Eric is going to turn us to homeowners in just a minute. 

And so I'd like to just, very briefly touch on the push points along that continuum from research to real world impact and the first thing I want to talk about is our knowledge transfer-- our knowledge transfer to our member companies like Travelers. And we do this through loss control training, through working with underwriters, through working with people like Eric who are managing catastrophe programs. And the purpose of it is to give our member companies the tools to help their policyholders reduce loss and for them, themselves, to understand vulnerability. 

We also do our knowledge transfer to regulators. As Roy said, we talked to the National Association of Insurance Commissioners, but fundamentally, it's for companies, like Travelers, to really understand our work and what it means to the customers that they serve. 

So the second point along this continuum is what I would call practical information for policy holders and some of that does, of course, come from the lost control engineers, in terms of what they're doing with their commercial policyholders, but we also call this news you can use directly to policyholders. We do monthly infographics and other articles. We've done ready guides--most recently on hurricane and wildfire--that dig deeper than these, sort of, monthly infographics. 

We have a Business Continuity Program--OFB-EZ. We have an Emergency Preparation Program, which we call EZ-Prep. All of these things are really designed for the commercial policyholder to take up on themselves, without necessarily needing that loss control input. Whereas the loss control people provide a very important service at a particular point in servicing the policyholder, we certainly want to give the commercial policyholder tools along the whole way so that they can build better, that they can maintain better, and that, to the extent that repairs are needed, they can do that in ways that are resilient. 

The third piece along that continuum is our fortified commercial standard and that's where a lot of it comes together--a lot of the research that we've done comes together, in terms of a holistic view of a commercial building and The Lodge at Gulf State Park that you saw is one of our very first fortified commercial buildings. And you saw what the general manager there had to say about how proud he was to have a fortified commercial building, but also how happy the people that were in that building during that storm were to be there and not to be anywhere else. 

And I will say one thing about that particular building--that particular fortified commercial building is that it was actually rebuilt or the building was built on the site of a former hotel that was actually destroyed 10 years earlier in a hurricane that hit exactly at that place. So that, to me, is the epitome of building back better and building back stronger. And we've seen that with fortified commercial in Alabama and other places, as well. 

And the final piece I want to mention where it all comes together and I think, it's probably, a good segue to what Eric is going to be talking about is community resilience. I'm talking about commercial; he's talking about residential, but you need strong homes and you need strong communities-- strong homes and strong businesses to have strong communities. 

So one of the things that was not in the clip that that gentleman from The Lodge at Gulf State Park said-- we have a slightly longer video--but he said the whole town never closed, our restaurants never closed, and we served as a beacon of hope for many in this community. They actually had their employees whose homes had been destroyed or whose homes were threatened actually stayed at that hotel during the storm and never lost an hour of work. 

So that's really what, what we do is all about. It's about saving property from loss, it's about saving jobs, obviously, preventing injuries, as well. And together, this embodies our commercial storyline and really, our larger mission, as well. 

So I'm going to stop here, but certainly happy to answer questions you might have about our commercial programs. We have one more video for you to watch before Eric Nelson speaks about his perspectives on IBHS. Thank you. 

(DESCRIPTION) 
Logo, Insurance Institute for Business & Home Safety. I.B.H.S., Wind Research. In the background, from the inside, a structure collapses in wind. Two flatbed trucks sit on a road. Each has a long bed filled with large pipe pieces. A large building under construction. Rows of fans turn. The side blows off a house in a large structure. Items blow around in a house nursery. Items blow around in a kitchen. The roof lifts off a house inside the structure. It blows out the open side of the building. From the outside, the roof blows out onto an entrance road to the building followed by debris. 

(SPEECH) 
[VIDEO PLAYBACK] 

[MUSIC PLAYING] 

(DESCRIPTION) 
A man puts his hand up onto a piece of plywood and moves it down to each section. 

(SPEECH) 
We've got sheathing on the top floor, sheathing on the band, and sheathing on the bottom floor. If you're going to make this kind of connection, you need to use a strap and the key thing here is that we've got balance. We've got the same number of fasteners on the top floor as we have on the bottom floor. 

(DESCRIPTION) 
A carport in the large structure shakes. The roof blows off a building in the structure and smoke pours out. Text, Strengthened Carport at 110mph. Attached structure testing. Ripples on the material on the top of a building inside the structure and a carport that doesn't move. 

(SPEECH) 
It's always quite interesting to see the house come apart here. 

(DESCRIPTION) 
A house under construction. Text, Garage door damage was more frequent in hurricane Ike when garage door damage occurred. But in the two tornadoes, there was greater structural damage. A house is wheeled into the structure in time lapse. 

(SPEECH) 
It's much better that it comes apart here in the lab, where nobody, hopefully, gets hurt, nobody's property is damaged. It's a terrible thing when that happens to somebody in real life, outside of the test chamber here. So if we can limit that sort of disaster to this location, that's the ideal situation. 

(DESCRIPTION) 
A garage door bends inward in a plywood house in the structure. 

Split image. On the left insulation hangs from the ceiling and lies on the floor of a room, and water drips down. On the right, labeled "fortified," an intact room. News clip. Text on left, man-made hurricanes. On the right, lab simulates disasters on homes. 

(SPEECH) 
To find out, they built another home, then prepared to turn on the massive wall of wind. 105 fans, each one pumping out 300 horsepower with a combined output of 140 miles per hour. That's the equivalent of a category three storm. 

(DESCRIPTION) 
Two houses side by side. The one on the left blows off its base and falls apart. The house from the side as it blows away. The other house remains and is labeled "fortified." Logo, Insurance Institute for Business & Home Safety. I.B.H.S., Wind Research. From the inside, a house collapses. 

(SPEECH) 
[END PLAYBACK] 

Well, good afternoon, everyone. Thank you for attending today's event. I'm so proud that Travelers could be part of this journey in supporting IBIS on such a worthy, worthy mission. 

(DESCRIPTION) 
Text, Research and Mitigation. Insurance Institute for Business and Home Safety. Located in Chester County, South Carolina. Controlled Testing Environment for Hurricane, Hail, Wildfire. Large test chamber approximately 21,000 Square feet / 4 1/2 basketball courts in size. Over 100 fans able to produce wind speeds up to a CAT 3 Hurricane (130mph). Photo of the facility. Three photos of houses inside the facility with different types of damage, with text above and arrows that go to the two sides, Full Scale Testing is Able to Replicate CAT 3 Hurricane 

(SPEECH) 
And what I want to just reflect upon is the journey that we've been on with Travelers and the industry in building this facility and talking about what we've learned. 

It's hard to believe that it's been 10 years since the facility was built. It just seems like it just went by so quickly. And that last video was something--I attended that last--excuse me--that video was the first test and I attended that in person and it was really then, I saw the aha moment of what could happen. Living in New England, we don't see that type of event or see the hailstorms but seeing it in the lab and recognizing that level of damage that can occur, it's really remarkable what they've achieved. 

And so if you look back, it was really after 2005, Hurricane Katrina, that the country faced unprecedented damage. The magnitude of the destruction was unprecedented. We talked about Katrina was the size of France in the damage that occurred. I mean, really unbelievable size events. 

That year, industry losses approached $100 billion for the first time. Economic losses were likely above $150 billion, really unbelievable size amount of damage that the country faced. This was a wake-up call to public policymakers, to the insurance industry, and consumer groups. 

We were struggling with a need to change and struggling with ideas and frankly, the industry had a lot of different ideas, but the one thing that we could coalesce upon was mitigation--the need for more mitigation. At Travelers, our leadership was passionate about being part of the dialogue to develop a solution and this is where I remember a study back in 2004, 2005 from a little sleepy organization called IBHS. This was before the lab was built and this little organization did a study on Hurricane Charlie and said, you know, Florida building codes reduced the potential damage from hurricane winds by 50% when they were the latest Florida codes. 

We saw that study and we said, boy, if codes could do that, from our perspective, we need to do more, and we need to do more across the entire country. And that's when we started the dialogue with Julie Rochman, the former CEO, and Debra about joining IBHS. So Travelers joined IBHS back in 2006 and we're very proud to be one of the founding sponsors of this facility. We're convinced that we can do more. We can do more related to building codes. 

And so now, I'd like to just move on to talk about, maybe, some of the major challenges we face now going forward. 

(DESCRIPTION) 
Text, Top U.S. Industry Catastrophe Losses (includes Personal, Commercial and Auto Lines). Gross B.F.I.T. in billions. A bar chart labeled Industry Insured Losses. The y-axis is labeled B.F.I.T. losses in billions and goes from 0 to 500. On the x-axis are three bars, 1990s, (309 billion) 2000s (386 billion), and 2010s (447 billion). Each bar has bands of different colors with the key on the bottom. Red, tornado/hail, blue, winter storm, orange, wildfire, light green, earthquake, other, dark red, flood, N.F.I.P., cream, hurricane. Footnote 1, Incurred losses adjusted for inflation, state population growth and wealth (GDP). On the right is a list of the Top 15 Events (1990-2019 and their costs in billions of dollars). 

Source: I.S.O. Property Claim Service (P.C.S.), as of November 2020 (Personal, Commercial, Auto). Source: National Flood Insurance Program (N.F.I.P.) as of November 2020 (Personal, Commercial) 

(SPEECH) 
And so, as you look at this, the challenges that we face, this is just a graphic that just explains industry losses over time. If you look at the losses in the '90s compared to 2000s, compared to 2010--that decade-- losses are up almost 50% over that time. 

And you can see--when we started this discussion, it was so much focus on hurricane, but now we see, there's a lot more perils that are causing significant damage. Hurricanes are a major contributor, but also tornado hail. When you look at the amount of tornado, hail damage, the amount of earthquake damage, winter storm damage, flood damage, it's pretty significant. 

And then you look at over time, the table on the right just lists some of the major events in today's dollars. So if Hurricane Katrina were to happen today, it'd be $90 billion. 

But you can imagine, what would an event in the Northeast be? An event of a category three event hitting the Northeast would be well over $100 billion for one event if it was a strong category three. 

So we've learned a lot and from this, we know we can do more and I appreciate what Roy and his team have done is risen to those challenges and really had groundbreaking research, as you saw in those videos, for hail, for wildfire, for winds. Our challenge is now trying to implement that. 

Now we've gotten some of the changes and some of the scientific information into the building codes, but we know we can do more. And so, doing more means getting the message out to consumers that you could build a home for relatively small amounts of money to mitigate the losses. I'm 

Very proud that Travelers also sponsors Habitat for Humanity to build fortified homes along the coast. And we've seen from our experience that you can spend anywhere from 5% to 10% additional in building costs and labor costs and you can mitigate the house and that's a fortified home. If you go on the IBHS' website--disastersafety.org--they'll talk about the mitigation that can happen. So with that, why don't I talk about some examples of that with a home that we've learned along the way in the journey. 

(DESCRIPTION) 
A graphic of a house in gray and white. 

(SPEECH) 
So these are some practical solutions that we have learned. So from the roof, we can look at this. 

(DESCRIPTION) 
Text, How I.B.H.S. Research has influenced the Insurance Industry. Roof cover. A chart of roof shingle hail impact ratings. An arrow points to the roof. 

(SPEECH) 
One of the things that we've learned in the auto industry is if you put information out to consumers, they will gravitate to the cars that are safer for their families. Well, IBHS has done groundbreaking research to talk about shingles and what shingles perform better than average and so this is just an example of that. 

What's very interesting to me is a lot of the manufacturers that scored and had lesser quality roofing materials than the average have actually decided to pull those products from the marketplace. So really learned a lot on the roofing materials. We've also learned that you have underlayments in the roof. 

We've also learned about aging. 

(DESCRIPTION) 
From above, several rows of houses. A group in the center has bars across them. 

(SPEECH) 
Aging is another factor. What you see in the picture here is an aging farm so over time, IBHS is looking at roofing materials and see, how does it weather after five years or after two years, five years, 10 years? And we're going to learn a lot of lessons from that. 

(DESCRIPTION) 
A bar chart, Damage frequency by roof type. Hurricane Michael (2018) Three types of roof cover. Gable, 70%, Gable/Hip Combo, 86%, Hip, 56%. 

(SPEECH) 
We also look at other building components and so we look at the different types of roofing materials that are out there and the different types of roofing and different pitches of roofing. So that's very important in understanding the risk associated with building a home. 

(DESCRIPTION) 
The garage door is labeled, and a star appears on it. 

(SPEECH) 
As we saw in the video, garage doors, it's very important to think about garage doors. If you're in Florida or in a high-risk zone, you can brace your garage door to mitigate the loss. 

(DESCRIPTION) 
The front door is labeled, and a star appears on it. 

(SPEECH) 
One of the ones that was the most simplest thing in the world that I learned along the way is if you look at your front door, the front door opens inward. Well, if instead of opening inward, it opens outward, well that'll be a form of mitigation that you can do--how you actually look at how you install your front door. 

(DESCRIPTION) 
The upper left window is labeled, and a star appears on it. 

(SPEECH) 
Windows are so important. Windows, you can either have mitigated, you can get hurricane glass, you can get hurricane shutters. What types of windows you have on your house. 

(DESCRIPTION) 
The siding is labeled, and a star appears on it. 

(SPEECH) 
Siding--vinyl siding versus hardy plank siding versus fiber cement also impacts the risk levels of your house. So these are all elements that you can think about. 

If you move onto wildfire-- 

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Text in lower left corner, Defensible Space, Non-Combustible Zone 

(SPEECH) 
I believe that's the next one--we've talked about the groundbreaking research. It's so simple--it's so simple--to have defensible space around your house, a noncombustible zone. In our own Travelers, we use air imagery to look at several counties in California to see how many consumers are actually coming up with defensible spaces around their house. 80% of consumers in high risk zones, our study found, was they weren't clearing the brush and the debris and the small trees from around their foundation around their homes. 

And so there is a lot of practical solutions that IBHS has come up with and so those solutions [inaudible]. Again, you can find that on Disaster Safety on Travelers Prepare & Prevent and so there's a lot of information out there. Thank you. 

All right. 

With that, Joan, I'll turn it back to you for questions. 

Ok. Terrific. Thank you, Eric, so much for talking really, about how we're using this research that IBHS is producing in our own research. So Roy, Debra, Eric, great job. 

(DESCRIPTION) 
Joan Woodward full screen. 

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We're going to get to a number of questions now. We're going to take them as they come in. I see we have 13 or so in the Q&A function. Please do submit them using Q&A so just hover over the bottom of your screen there and type in whatever question you have. We'll get to them in a minute, but first, I have a few. 

So Roy, first to you. This is a very unusual year for all of us, to say the least. How is this ongoing pandemic impacted a community's ability really to prepare for natural disasters? Has there been an impact of the pandemic on these natural disasters? Because we've had so many of them this year. 

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Roy Wright full screen. 

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It has. So what has happened during COVID is the approaches of how we respond and even evacuate from natural disasters has fundamentally changed. You know? So they would have preemptively issued evacuation orders well in advance, sent people to congregate, kind of, gatherings and shelters. Well during COVID that hasn't been possible. 

So they've really narrowed who has to evacuate and it's put an even more important spotlight on your home and how safe is your home? Can it be your place of refuge? And in some important ways, as we work with emergency managers, they've always attended to mitigating homes. It's been important, but it has come up a couple of clicks. 

And so we're looking at elements--and we've gone out on the wind, on the hurricane, as well as on thunderstorms and wildfires--what can people do to their homes? Go to disastersafety.org, you'll see a wildfire ready, a thunderstorm ready, a hurricane ready. Some of these things are free. Some of them may cost $100 or $200 and some of them begin to step up. 

The most important piece--and this really cuts across all of the pieces we deal with in the wind-driven areas--is the roof and that's an element that while we've talked a bit about fortified earlier, for fortified gold, you needed that new construction. But fortified roofs, which seal the roof deck, make sure that the roof deck itself is nailed in in a way that it's not going to lift up, and then locking in the perimeter of the shingles, all of that can happen on an existing home. That kind of resilience can play out and if you have a roof that can withstand the wind and rain, you can stay home and if you had to evacuate, you will be able to return as soon as the power's back on. That's been so important during this COVID season. 

OK. Great. Thank you, Roy. So that's on your website. Right? People can go and look to find out how they can fortify their existing roof right now on your website. 

Yes, ma'am. 

And Joan, can I say something on the commercial side? 

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Debra Ballen full screen. 

(SPEECH) 
Yeah. I was just going to get to you, actually, because-- 

OK. Same question on the pandemic and one of the things that, actually, I know Roy stated early on is that natural disasters were not taking a hiatus this year while we were worrying about the pandemic. And we said that in April and boy, that was the most prescient thing perhaps, that I have heard all year. 

But we were thinking about commercial and initially, we were thinking about businesses that had no employees, but those businesses still need protection. So we've gotten out some information through our commercial infographics on how to protect your vacant business for the inevitable that happens and that could be fires--that could be structural fires, as well as natural disasters. But the fact that there are no employees in the business does not mean that it is not at risk for property loss. 

Then hurricane season rolled around and for IBHS, it was right about the time that we reopened. We reopened partially, just in terms of people who need to be on our campus and as soon as we had employees there, we realized we needed to have a sanitation engineer who would protect those employees from COVID. And in our particular case, we substituted a night cleaner for a day cleaner and that was great. It was exactly the right choice. But in other small businesses, the person that used to do maintenance became your sanitation engineer. 

So what happens when hurricane season is upon us and instead of somebody checking to batten down the hatches and make sure that everything is airtight, and windtight, and watertight, they're making sure that no one gets COVID? So we put out information to help small businesses navigate that and followed up with wildfire and we'll probably hit winter weather as we get closer. 

So one of the things that we've tried to do-- this is not fancy research. This is practical guidance for business owners to understand that those risks are still there. Their business model may have changed, and they need to find the same ways to protect their policyholders, protect their employees from weather risks and fire risks, just as they did when they weren't worrying about the pandemic. 

Great. That's great practical advice. Thank you, both. So Eric, to you now. Obviously, we have a lot of agents and brokers on the webinar today who really play an important and critical role in supporting their customers as they prepare for all of these catastrophes. So what advice can you share with our agent population here to help them really, better support customers? You've been working on fortified standards for a long time and you know, you're really our resident expert there. And so how can we help-- how can our agents help their customers know about this? 

Well, first and foremost, I would say for our agents and broker partners, I'd be consulting with consumers about their coverage. One of the things that we saw unprecedented in California in these rural areas is a concept of demand surge and so when you think about demand surge, there might be a shortage of labor and materials that happens with a major event. So make sure that the consumers have the right tailored coverage to suit their needs. That would be the first one. 

So periodically look at the different products that you're offering. Do they need a flood insurance policy? I wouldn't always rely on a FEMA-NFIP flood zone to advocate to consumers that they might be prudent to buy a preferred policy outside of the high-risk zone. So that'd be number two. 

Number three: make sure that you have your consumer's email address in our systems or whoever-- there's always things that you can do right before an event to mitigate the loss. So if you're thinking about wildfire and if you have time before, during the season, clearing the brush, immediately before a hurricane, bringing in your lawn furniture, bringing other elements. Those are all very important. So there's brochures that are available and information that's available on Travelers Prepare & Prevent. There's also those different brochures, but additional information that's on the IBHS website-- disastersafety.org. 

OK. Thank you, Eric. So now we're going to get to audience questions, which is always the fun part of the session and they were coming in. So please do submit them in the Q&A function. 

This one is to you, Roy. How can we get information to present to our clients about fire safety? So what are the five things a homeowner who is in a fire line need to do today to prepare for fire season? 

Absolutely. So-- 

And that's from Karl Susman in Susman Insurance. 

Yeah. So we have two websites. Disastersafety.org is the one that has everything that is set up for consumer-facing pieces and IBHS.org has information that is more particular to the insurance industry. And so I would send you to disastersafety.org. There are particular things that you can do, that you should do from a maintenance perspective. 

You mentioned wildfire as one so Eric mentioned the first 5 feet closest to the structure needs to be entirely cleared of anything that can burn. That also includes your outbuildings, like garages or sheds. There's attention to the vents for attic and under crawl space that need to have the right kind of mesh in place. And then the materials of your siding and roof become really important and we'll walk you down those pieces. 

And again, because we try to make it practical, we don't let perfect become the enemy of the good. We walk you through, what are the practical steps you can take? In a wildfire area, if you had no deck, you would eliminate a risk, but decks are part of how families live around their home. So what can you do to the deck to mitigate and reduce that risk? All of those pieces--disastersafety.org. 

OK. Great. Maybe this is to you, Eric Nelson. Can you talk about the state of the flood insurance program, solvency? What about privatization? It's been in the red for so long here and the federal government has been subsidizing for so long so what is the outlook for privatization? 

Well, let me first start with what we sometimes forget was when the NFIP was actually set up in the '60s, it was designed to be subsidized and that was the public-private partnership that happens. To get subsidized coverages, communities had to join and agree to mitigate the risk and so that was designed with that subsidy in place. I don't think the government realized how that subsidy would grow over time and maybe the unintended consequences of that were a lot of development in higher risk areas that may not have occurred if not for that subsidization. But we are where we are the program. People live where they live. We know that flood risk is going up. 

First, let me start with solvency. The program is solvent because it's the federal government. We just have to pay for--they just have to reauthorize funds each year and every time there's a deficit. And I think the political landscape isn't such that they'd ever cut off funding for that program. 

Talking about privatization is important because the government does recognize that they should spur a private market and so there's two ways that the government is starting privatization. One is they actually have reinsurance on the NFIP Program through the private market. Second, they're allowing for private markets to meet the Freddie Mac-Fannie mortgage requirement so you can have a private policy that will meet your mortgage obligations. So there are many companies that are piloting programs for privatization for homeowners. 

And then in the commercial line space, companies like Travelers, we have written flood insurance for many years so. We write flood insurance excess of NFIP policy because that's what our customers need. 

OK. Great. I have a question from my good friend, Sue Espinoza, out there, one of our agents. Post-wildfires, we will be dealing with potential mudslides. Is there anything that can be done to prepare for these types of risk on mudslides? So maybe, Roy, you want to take that one? 

Yeah. So flood after fire is a real issue in these wildfire areas so a couple of things. Under the National Flood Insurance Program, one of the only ways that you can get immediate coverage without a 30-day wait period on an existing home is when there has been a wildfire and you can get that coverage. And so I would tell folks, in many cases, they're getting a preferred risk policy. That $550, maybe, some of the best investment that they make. 

As I said earlier, we focus on the structure, but we have partners at the Forest Service and other entities that look at that broader landscape piece and there is work that can be done on that burn scar. So when you have seen those, kind of, flyovers of wildfires, you see it looks really black. Ostensibly, that is like an asphalt sheet and so when water hits it, it just comes flowing through. 

And so what we have worked with, folks, is you need to do immediate reseeding of those areas so that early on, in the next season, you're getting the growth you need and they put a series of breaks in place. You just never know how much rain is going to fall and where and so sometimes, there's a randomness to that, that ultimately, for a homeowner, insurance is the best pathway for really, the first three years after the wildfire. 

OK. Thank you, Roy. Another question coming in from John Berglund If California did controlled burns, wildfires would do much less damage, obviously. As individuals or businesses, how can we help encourage policymakers to do these controlled burns? And since Roy, you were in government for so long, what are your thoughts here? 

So let's focus on California. So of the forested land in California, 57% of it is owned by the federal government, only 3% of it is owned by the state of California. The difference between those two then, is private lands. And so any kind of work related to controlled burns or other kind of clearing of dead trees that may have been beetle-infested or the like has to happen as a collective. 

You are absolutely right, John. It has to be an all of the above approach to mitigating wildfire because we can talk about what to do with the structure and the neighborhood, but we've got to deal with that broader work in the ecosystem. How can you best encourage that? The lead player on this is the US Forest Service and so that's the place to start. And then, the state legislature in California, CAL FIRE, and other organizations that lean in there. 

There's not disagreement that this is part of the answer, but one thing about climate change to bring in here, the window of time of when to do controlled burns has shrunk over the last 10 to 15 years. As the fire season has gotten longer and the rainy season has become more compressed, the window of where to do this, kind of, wildfire mitigation on the broader landscape has narrowed. 

OK. Thank you for that. Another question now from Ed Fitzgerald in St Paul, Minnesota. Is there a site for the results to date of which roof shingles have outperformed others that he can access? He looks like he needs a new roof. 

Yeah. 

Is there--like the Insurance Institute for Highway Safety ranks cars, do you rank certain products that are used in buildings? 

Yeah. So the only rankings that IBHS has published to date have focused on the hail dimensions of that. While we don't do all products, the major manufacturers have been ranked. Disastersafety.org and click on Roof and you'll be able to see that. 

In Eric's presentation, it may have been small for some of you, but there was one of those pieces where you'll see a dozen different asphalt shingle products that were ranked. And as Eric said, those at the bottom of the list have already pulled those products and have replaced them with better products. 

Roy, ironically, when I was getting my new roof, my contractor recommended one of those manufacturers and I said pass. But I'm a consumer. 

And that's great. If the gentleman who asked the question is buying a new roof and you go to the IBHS website and you choose a product that will provide you with a better roof, we have accomplished our mission today. 

But even beyond just the type of roof, there's questions you need to ask your contractor and so there's a lot of good information on the IBHS website that talks about roofing the right way. And so there's other things that you can read up on that to make sure you ask the right questions. 

OK. We have a lot of questions coming in from various agents and others here about, how do you fortify an existing home? So is all this discussion really about building new homes to the fortified standards or to other stronger standards? Or what are the five things you could do--Eric, you talked about, do people change their front door from going inside to opening outside? Can you even do that? 

No. Let me talk about and Roy will correct me if I'm wrong on anything, but when you think about fortifying the roof--because, like I said, I was buying a new roof and I went and looked at the fortified standards. And so you can look at the roof versus the entire building envelope and so fortified roof is probably, the most important thing you can do for the best bang for your buck. 

And so you talk about taping the roof seams. You talk about an underlayment underneath the shingles. You talk about the type of nailing that you might do in the shingles. And that's the key elements--I'm sure there's more if you go out and look at it, but that's the key elements of that. 

And by the way, I'll do a brief ad for Travelers in those states where we have our new product in the marketplace, we will offer a discount for four to five--if a consumer goes and does the mitigation, you can expect to get a discount of anywhere--in a high risk for hurricane, anywhere from 10% to 20% discount. And so, it varies by state, varies by what's been approved, but we do give a discount for that. Now hopefully, ultimately over time, that will make its way into building codes and it'll just be available across the board. So that's a great question. Thank you. 

Yeah. I think you're absolutely right and I'll share this quickly, as we keep referencing this disastersafety.org. All of those various pieces of how structures can be impacted are all laid out there in a way that you can access it. But we're here to serve the insurance industry and so, this is the, kind of, thing that we partner with companies, like Travelers, and with agents and brokers who want to take this information then and use it with their customers. 

Great. OK. A lot of questions about, what are these websites? And we're going to send a follow-up email to everyone who registered with all the websites, with all this information, as well. 

And there will be a replay. There's a lot of questions about, can I show this to my folks in the office? We'll have a replay available of this particular webinar on our website--the TravelersInstitute.org. Give us a day or so to get it posted, but it will be up for anyone to see and view. 

OK. Another couple of questions coming in here from a real estate agent in, looks like, Charleston, South Carolina, a Jamie Pfaffenbichler What is the best way to protect my family when a named storm is on the way? So what are the three or four things that--the storms on the way. As you just said, you can't go to a community center because of COVID. What do they do?

I'll take a first pass at that. You got to have a plan. During peacetime, if you live in a hurricane-prone area, you and your family need to have a multi-tiered plan about how the various severities of events that could coming your way and what you would do. There's a set of things you would do immediately before the storm occurs. 

If it's a Cat one, for example, it's not likely something you would need to evacuate from, but there's a lot of things that can pick up and turn into flying debris, things that you need to know to do around your home. 

What happens in a Cat two or Cat three? And in Charleston, I would be concerned about storm surge, as well. And the National Hurricane Center sets out warnings on those pieces, 

But as you look at that progression, knowing where you're going to get the information from and having a plan of where you intend to go, even in a COVID, kind of, place. If a Cat four a Cat five is coming your way, you cannot shelter in place. You must move. And knowing where you intend to go and what your plan is to return is always better to do when you can be deliberative about it because if it's just the afternoon where the mayor has issued an order and you've been watching The Weather Channel for the last six hours, you are not in the right state of mind to make those decisions. 

One of the phenomenon of this crazy hurricane season has been the rapid intensification. And I think that really underscores--you know, we talk about sunny day maintenance, we talk about sunny day retrofitting, we talk about the importance of doing things before the storm and I think this season has really underscored why we say that. I mean, Roy said well, the mayor just said evacuate a day and a half ago. This was, like, a small tropical storm that was going in a different direction. And we've seen in a period of hours, it goes from that to a category three that's heading right to you. 

So I think the watchword from this year--and let's hope next year, there is no COVID evacuation problem-- but the watchword is this can happen very quickly. And so the more that you can do to, we say, fortify your home, but not only the fortified standard. The maintenance and other issues that you can do as a homeowner become that much more crucial when the storm that you were expecting is a lot less than the storm that actually comes. 

Yeah. One more, kind of, examination point on that one because storm surge along the coast, when people die during hurricanes, the vast preponderance of them die in the storm surge and understanding what your plan is when that water comes invading your community is so critical. 

No. And I'd I underscore that by saying, play it safe. I mean, again what Debra said, if you think it's a category one and it's heading towards your area, you're in trouble Charleston--if you were my parents, I'd say evacuate. If you were my friends, I'd say evacuate and so go to a place and get safe. 

OK. Last question, then we're going to wrap up. I'm going to tell everyone about our terrific programming we're going to start in January and some of our guests we're going to have so stay tuned. 

But last question here, a lot of focus--this is from Ted Walsh. Ted says: a lot of focus in building safer homes with better products and quality construction. Do you ever reach the conclusion that some homes should just not be built at that same location? Many storms and fires keep repeating in the same locations. We know it's politically challenging to discuss this, but ever is there are time and is there a push in some of these communities not to rebuild? 

I think you are raising a very good public policy question. There are many places that you'd step back say perhaps, they shouldn't have been there, but unfortunately, they are built there. You know? It's not like the federal government can afford to spend a trillion dollars a half a trillion buying up the housing stock along the coast. 

I think the thing we need to do is work with our public policy makers to talk about developments. That we continue to develop new developments in high risk areas should really step back. And that home is destroyed--we do have to have that common sense approach to say, should it be built there or somewhere else? And I know Roy, you might want to say something about the FEMA Program. 

Yeah. The one thing I'll put behind this is, this is a question rightfully placed with state and local government. These are questions about property rights and tax basis and the like and there are some small federal programs that get assessed around the edges. 

But this is a really hard question and most of the time, post-disaster, American exceptionalism is the response. We will be bigger, bolder, faster, and stronger and common sense is usually not what leads the day, but those conversations can only happen inside the context of the community that has been impacted. I never think it's helpful for an external big brother to start telling someone what they can or cannot do in their community. It just doesn't work. 

Well said. Well said, Roy. And I think we'll just leave it there so Debra, Roy, and Eric, really valuable information. Again, we're going to send all the websites and we'll send the replay link to everyone when it's available. So thanks for your time today and the work you're doing. 

I'm going to turn to our upcoming webinars. We're thrilled really so many of you have joined us over this past six months of doing these Wednesday webinars and we appreciate the opportunity to connect with you virtually. We can't wait to be back in person doing these sessions. 

So I'm excited to share that we'll continue our webinar series starting on January 13th. It's a Wednesday at 1 o'clock. We're going to kick it off with a very important topic. 

I'm going to be interviewing a former FDA commissioner and talking about the race to distribute the COVID-19 vaccine. So all those complications and supply chain management issues and decision-making about who gets it and where will come up in our discussion with this former FDA commissioner, again on January 13th, at 1 o'clock. So please, do visit travelersinstitute.org and we're going to post a number of the upcoming ones for January and February there and you can also register. 

So thanks again for joining us. Happy holidays, everyone. Please use your masks. Enjoy your families in a limited capacity this holiday season and again, to our terrific guests today--Roy, Eric, and Debra-- thank you so much and take care of all. 

Thanks, Joan. 

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