AIR Worldwide Estimates Insured Losses for Hurricane Delta Will be Between USD 1 Billion and USD 3 Billion
October 14 2020 - 7:05AM
Catastrophe risk modeling firm AIR Worldwide estimates that
industry insured losses to onshore property resulting from
Hurricane Delta’s winds and storm surge will range from
USD 1 billion to USD 3 billion. AIR
Worldwide is a Verisk (Nasdaq:VRSK) business.
Hurricane Delta made landfall on October 9 around 6 p.m. CDT
near Creole, Louisiana, as a Category 2 storm with sustained wind
speeds of 100 mph and a central pressure of 970 mb. Delta brought
strong winds and storm surge to coastal communities, mainly in
southwestern and south-central Louisiana. The southwestern corner
of Louisiana was also hit with heavy rainfall, up to 17 inches in
some places. According to AIR, Hurricanes Laura and Delta made
landfall roughly 12 miles and six weeks apart. Strong winds from
these storms impacted areas in common, including mainly the coastal
area of Cameron Parish and Lake Charles and environs, although
Delta’s maximum winds were significantly weaker than Laura’s. AIR’s
modeling approach assumes independence between these events, which
is reflected in the published loss range. Given that the two events
affected the same area within a relatively short period of time,
however, there are several aspects worth noting. Before Delta made
landfall, aerial imagery showed that many structures in these areas
had blue tarps on their roofs; after Delta many of these structures
still had blue tarps on their roofs. On the one hand, wind-driven
rain and wind-borne debris impacts following Delta could have
exacerbated the damage caused by Laura to these properties.
Furthermore, structures that may have been weakened by Laura’s
winds may have been further damaged by Delta, despite its moderate
winds. On the other hand, it could be posited that structures that
had the potential to be damaged were already damaged by the
relatively-stronger Hurricane Laura, and therefore, not much was
left to be damaged by Delta. It is important to note that two
hurricanes impacting the same area within a short period of time is
not a new phenomenon; in 2004 Hurricane Frances and Hurricane
Jeanne both impacted virtually the same place on the east coast of
Florida within six weeks of each other. There were reports of loss
amplification at the time, particularly in Florida; given these
back-to-back events, the same cannot be ruled out in Louisiana,
despite the fact that they are different events and fall under
different insurance conditions. Large surge occurred far east of
Delta’s Creole, Louisiana, landfall because of the storm core’s
elliptical shape, featuring a huge eye elongated in the east-west
direction. Compared to Laura, the maximum surge elevation of Delta
was lower, except in southern-central Louisiana from Freshwater
Canal Locks eastward to Morgan City, including Vermillion Bay and
nearby bays, where surge inundation was most impactful. The
parishes more heavily impacted by Delta were farther east than
those more heavily impacted by Laura. According to AIR, the storm
flooded and blew tarps off homes and businesses already damaged by
Laura and blew shingles off roofs that had not been impacted by the
previous storm in the vicinity of landfall, the coastal area of
Cameron Parish, and to the northwest, including Lake Charles. The
storm also blew shingles off roofs in these areas that had not been
impacted by Laura, including Lafayette and environs.
Included in AIR’s estimates are losses to onshore residential,
commercial, and industrial properties and
automobiles for their building, contents, and time element
coverage.
About AIR WorldwideAIR Worldwide (AIR) provides
risk modeling solutions that make individuals, businesses, and
society more resilient to extreme events. In 1987, AIR Worldwide
founded the catastrophe modeling industry and today models the risk
from natural catastrophes, terrorism, pandemics, casualty
catastrophes, and cyber incidents. Insurance, reinsurance,
financial, corporate, and government clients rely on AIR’s advanced
science, software, and consulting services for catastrophe risk
management, insurance-linked securities, longevity modeling,
site-specific engineering analyses, and agricultural risk
management. AIR Worldwide, a Verisk (Nasdaq:VRSK) business, is
headquartered in Boston, with additional offices in North America,
Europe, and Asia. For more information, please visit
www.air-worldwide.com. For more information about Verisk, a leading
data analytics provider serving customers in insurance, energy and
specialized markets, and financial services, please visit
www.verisk.com.
###
For more information, contact:
Kevin Long
AIR Worldwide
+1-617-267-6645
klong@air-worldwide.com
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