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Frank Fischer and Mohit Pande cruised the neighborhood in their big black sport-utility vehicle, nodding and waving at folks out on the street. They counted the houses and checked out their build, looked closely at the property behind the homes, and estimated their value.

The structures, however, were not tidy ranchers surrounded by neatly manicured lawns. In this case the properties consisted of front walls ripped apart by a neighbor's roof and glass shattered by flying tree limbs. In the yards, massive trees lay uprooted. The damage came courtesy of one nasty killer hurricane by the name of Katrina.

Fischer and Pande were one of three pairs that the modeling agency dispatched to the Gulf

Coast to measure Katrina's footprint--an apropos engineer's term for the sweep and depth of the storm's destruction.

AIR has been doing such post-disaster surveys since Hurricane Hugo in 1989. Now, with nearly two decades of experience and a systematic and in-depth methodology to follow, Pande and Fischer provided a ground-floor estimation of Katrina's power.

"The analysis is at a property level," Fischer explains.

The purpose of their detailed investigation was twofold. AIR wanted to validate its existing hurricane model.

"We come here with the best scenario, the median scenario wind-speed footprint," Pande says. "So then the damage survey is to validate the wind-speed footprint that we have, to see that the damage that the model is predicting is in line with what we see here, with the actual observations."

AIR's clients can then better serve their customers, by wielding the refined footprint to triage their claims?and redeploy and fill in the cracks of their adjuster coverage to cover the hardest-hit areas.

In the technical terms of modeling, it means the insurance carrier can shift its forces to cover areas with the highest "average claims severity level," says Fischer. "If it's in Biloxi instead of Pascagoula, they'll send (more resources) into Biloxi."

The second objective, Pande explains, was to record details of the actual damage footprint and return to Boston to use them for future research to enhance the model. For instance, after the four storms in Florida last year, AIR modified the 2005 model to account for what's known as "aggregate demand surge," or the price increase in the order of magnitude for products and services needed to rebuild--concrete and lumber, for example. After one storm, prices for construction materials tend to inflate. After four storms in a row in the same region, they rise exponentially, and this has to be factored into the model.

For the Katrina post-disaster survey, the process began when Katrina first was christened, thousands of miles out in the Atlantic, and AIR meteorologists and engineers put a bead on it. As Katrina took aim at the U.S. mainland, Fischer says, the AIR team cranked up their modeling program, spinning out thousands of simulations.

Then Katrina hit--Monday at approximately 6:10 a.m. local time in southern Plaquemines Parish, La., near the town of Buras.

AIR immediately set out to narrow down its thousands of simulations to a few dozen potential scenarios, Pande explains, based on meteorological parameters such as central pressure and wind speed, and more earthly assumptions such as property distribution and construction. From these scenarios, the modeling company formulated those estimated insured damage ranges reported in the news. For Katrina, AIR's initial insured loss estimate was between $17 billion and $25 billion.

OUT OF MANY, ONE

The next step--and the reason Pande and Fischer traveled into Katrina's destruction--was to narrow down these scenarios further to one footprint, the scenario.

Armed with potential scenarios and footprint printouts, which look like a rainbow depiction of where Katrina stomped inland, each color representing a different wind-speed range, AIR dispatched three survey teams on Friday, Sept. 2, four days after Katrina made landfall. The teams dispersed though the stricken area, south, east, and west, to conduct their neighborhood-level studies and to find the edges of the footprint, where wind speeds dropped below 40 mph.

Their teammates surveyed inland for the footprint fringes, which extended about 200 miles, while Pande and Fischer surveyed along the coast, making squares on their maps. In each given town or region--Biloxi, Mobile, Gulfport--the survey team selected random three by three, or four by four, sections of town, usually four to each area of the makeshift grid. Then they counted the houses and business, and estimated the percentage of structures damaged, then the percentage of damage to these structures. They completed a survey of about 10 blocks to 15 blocks a day.

Then it was time for the mathematics to kick in. Pande and Fischer came up with ratios like 90 out of 130, 46 out of 77, with 10 percent to 20 percent wind damage. It might seem subjective, but Pande and Fischer, having been through this before, used their engineering knowledge and experience to gauge such ratios. They pointed to ruined businesses on the side of the highway, snapped photos, and cursed the light metal siding that had been torn off like paper. "That wouldn't withstand anything," Fischer says.

The two heaped scorn on EIFS (exterior insulation finish systems), a molded siding substance on many of the larger commercial properties, the casinos and condos. They shook their heads at structures slapped together out of unreinforced masonry.

Closer to the coast, the AIR survey teams also examined the flood-surge footprint. It's hard to miss. In Bay St. Louis, for three, four, five blocks in from the water, it looked like the sea had turned into an Abrams tank, a Howitzer cannon and heavy machine guns rolled into one, razing every house but somehow sparing the trees. "It's the kind of stuff you see from an F5 tornado," says Pande.

The storm surge ended near the train tracks, though. "Surge is binary for single family homes a few blocks from the coast," says Fischer, explaining how they cut off the surge footprint. "Zero, one. It's either gone or it's not."

When buildings appeared once again, as Fischer and Pande made their way along the coast, the wind damage analysis resumed, block by block.

When the AIR executives spotted people out front, they stopped to talk, perhaps even get a tour of the house's interior. Usually the owners were happy to oblige when they hear that both men were conducting damage assessments for the "insurance companies."

One woman in Gulfport, Linda Sue Clemmons, shared the tale of her and her mother, who's a heart patient without her meds. The day was fine, she said, it's the night she's worried about. The looters came out then.

Fischer and Pande offered her a gallon of water, a newspaper and a flashlight.

"When you get down here, you want to do your job," Fischer says. "But half of you says you should just fill the truck up with water and drive around all day handing it out to people."

They continued their AIR post-disaster surveys. As far as they could tell, on their last day of circling the squares, the AIR model performed well. The Gulfport and Biloxi areas appeared to take the highest wind, as their scenarios predicted.

"What we saw," says Pande, "is exactly what we expected."

MATTHEW BRODSKY is associate editor of Risk & Insurance®.

October 1, 2005

Copyright 2005© LRP Publications