Catastrophe risk modeller RMS has estimated that total U.S. insurance and reinsurance industry losses from Hurricane Sally will be between $2 billion and $3.5 billion.
This estimate, which includes wind, storm surge, and inland flood losses across parts of the Gulf and Florida regions, also includes losses to the National Flood Insurance Program (NFIP) of between $400 million and $800 million.
According to RMS, wind and storm surge is expected to account for the majority of the industry loss, somewhere between $1.3 billion and $2.3 billion of the total. Inland flood losses are estimated at between $300 million and $400 million, alongside the noted NFIP losses.
“Sally made landfall with much stronger winds than expected. While it weakened considerably as it moved inland, the slow-moving nature of the storm brought persistent wind and storm surge to much of the Gulf coastline, combined with heavy rainfall and widespread flooding to interior regions. Sally is another example of how hurricane damage can take many different forms,” said Jeff Waters, senior product manager, RMS North Atlantic Hurricane Models.
This estimate from RMS is slightly higher than the $1 billion to $3 billion range announced by cat risk modeller AIR Worldwide, while KCC has pegged insured onshore property losses from the storm at $2 billion.
These latest estimates are based on analysis of RMS ensemble footprints in Version 18.1 of the RMS North Atlantic Hurricane Models and estimates from the RMS U.S. Inland Flood HD Model. Additionally, NFIP losses, which are expected to be sizeable, were derived using an RMS view of NFIP exposure based on the 2019 policy-in-force data published by FEMA, the Version 18.1 North Atlantic Hurricane Models, and the U.S. Inland Flood HD Model, explains the firm.
Rajkiran Vojjala, Vice President, Model Development at RMS, said, “We expect Sally to be a sizeable event for the NFIP. The majority of NFIP take-up occurs in coastal counties, especially in the states most impacted by the hurricane, notably Alabama and Florida. However, the inland extent of heavy rainfall from this event means we’ll likely see NFIP losses stemming from inland flood as well.”
As we wrote recently, Hurricane Sally’s extreme rainfall and storm surge are expected to drive significant insured losses for the NFIP.
Hurricane Sally, which made landfall near Gulf Shores, Alabama on Wednesday, September 16th, 2020 as a Category 2 storm, was the 18th named storm of the 2020 North Atlantic hurricane season, the seventh hurricane, and the fourth U.S. landfalling storm of what is proving to be a very active season.
RMS adds that with Sally, the landfall location was well forecast by its HWind forecasting solutions.
“In the days leading up to landfall, our HWind forecasts consistently provided clients with scenarios indicating a potential Alabama landfall location, even prior to the NHC official forecasts trending east away from New Orleans. This event is another strong validation point in demonstrating the predictive value of these products,” said Pete Dailey, Vice President, Model Development.
Hurricane Sally U.S. insured losses estimated up to $3.5bn by RMS was published by: www.Artemis.bm
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Original Article Posted at : https://www.artemis.bm/news/hurricane-sally-u-s-insured-losses-estimated-up-to-3-5bn-by-rms/