TUESDAY, NOVEMBER 21, 2017
Hurricane Irma
9/9/2017 2:00:00 AM
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Post Landfall 19/15/2017 1:30:00 PM 
Landfall 9/11/2017 2:35:00 AM 
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Posting Date: 9/9/2017 2:00:00 AM

AIR estimates combined insured losses for Hurricane Irma for the United States and selected islands in the Caribbean will be between USD 20 billion and USD 65 billion.

For the United States, AIR’s estimated industry insured losses resulting from Hurricane Irma’s wind and storm surge range from USD 15 billion to USD 50 billion. Note that these estimates are based on the NHC's Friday, September 8, 5:00 p.m. EDT forecast advisory for Irma. Should the forecast track shift eastward and pass closer to Miami, U.S. losses could exceed USD 100 billion. The difference illustrates the sensitivity of losses to the storm track.

For selected islands in the Caribbean, AIR’s estimated industry insured losses resulting from Hurricane Irma’s wind and precipitation-induced flooding range from USD 5 billion to USD 15 billion.

United States

AIR’s estimated industry insured losses for the United States resulting from Hurricane Irma range from USD 15 billion to USD 50 billion. Note that these estimates reflect the forecast track as of the Friday, September 8, 5:00 p.m. EDT NHC Advisory. Should Irma’s track shift eastward and closer to Miami, losses could exceed USD 100 billion. The difference illustrates the sensitivity of losses to the storm's track. These losses include wind and storm surge damage to onshore residential, commercial, and industrial properties and their contents, automobiles, and time element coverage (additional living expenses for residential properties and business interruption for commercial properties). See below for additional information:

AIR’s modeled insured loss estimates for the United States include:

  • Insured physical damage to property (residential, commercial, industrial, auto), both structures and their contents
  • Additional living expenses (ALE) for residential claims
  • For residential lines, 5% of modeled storm surge damage as wind losses
  • For commercial lines, insured physical damage to structures and contents, and business interruption directly caused by storm surge (other flood losses are not modeled or reflected in estimates; business interruption losses include direct and indirect losses for insured risks that experience physical damage)
  • For the automobile line, estimates reflect AIR’s view that insurers will pay 100% of the storm surge damage
  • 2017 indexed take-up rates

AIR’s modeled insured loss estimates for the United States do not include:

  • Losses paid out by the National Flood Insurance Program
  • Losses resulting from the compromise of existing defenses (e.g., natural and man-made levees)
  • Losses from the flooding of tunnels and subways
  • Losses to uninsured properties
  • Losses to infrastructure
  • Losses to inland marine, marine cargo and hull, and pleasure boats
  • Losses from extra-contractual obligations
  • Losses from hazardous waste cleanup, vandalism, or civil commotion, whether directly or indirectly caused by the event
  • Other non-modeled losses, including those resulting from tornadoes spawned by the storm
  • Losses for U.S. offshore assets and non-U.S. property

Caribbean

AIR’s estimated industry insured losses selected islands in the Caribbean resulting from Hurricane Irma range from USD 5 billion to USD 15 billion. These losses include wind and precipitation-induced flooding damage to onshore residential, commercial, and industrial properties and their contents, automobiles, and time element coverage (additional living expenses for residential properties and business interruption for commercial properties). See below for additional information:

AIR’s modeled insured loss estimates for selected islands in the Caribbean include:

  • Insured physical damage to onshore property (residential, commercial, and industrial) and autos due to wind and precipitation-induced flooding
  • Insured loss to contents
  • 2016 Indexed Take-Up Rates
  • Losses due to business interruption
  • Losses to industrial facilities
  • Additional living expenses (ALE) for residential claims
  • For residential lines in the U.S. territories of Puerto Rico and the U.S. Virgin Islands, 10% of modeled precipitation induced flooding damage under wind policies
  • For residential lines in territories other than in the U.S. territories of Puerto Rico and the U.S. Virgin Islands, 100% of flood losses
  • For commercial lines in the U.S. territories of Puerto Rico and the U.S. Virgin Islands, insured physical damage to structures and contents and business interruption directly caused by precipitation-induced flooding, assuming a 10% take-up rate for commercial flood policies
  • For commercial lines in territories other than in the U.S. territories of Puerto Rico and the U.S. Virgin Islands, 100% of flood losses
  • For business interruption losses, direct and indirect losses for insured risks that experience physical loss
  • For storm surge, loss is implicitly accounted for in the wind damage functions

AIR’s modeled insured loss estimates for selected islands in the Caribbean do not include:

  • Losses to infrastructure
  • Losses to boats (Losses for boats inside a building may be estimated if their replacement value is included as contents.)
  • Losses from hazardous waste cleanup, vandalism, or civil commotion whether directly or indirectly caused by the event
  • Demand surge (Users may choose to turn on demand surge or input a demand surge function of their own.)
  • Other non-modeled losses
  • Loss to offshore properties, pleasure boats, and marine craft
  • Losses resulting from the compromise of existing defenses (e.g., levees)
  • Losses to uninsured properties
  • Other non-modeled losses, including loss adjustment expenses

Meteorological Summary

As of 5 p.m. ET on Friday, September 8, Irma was located about 195 miles east of Caibarien, Cuba, and 345 miles southeast of Miami tracking west-northwestward at 12 mph with minimum central pressure of 925 mb. It remains a Category 4 hurricane with maximum sustained winds of 155 mph. It is encountering increased mid-level moisture and warmer sea surface temperatures and is still benefiting from low wind shear. As a result, although its intensity is likely to fluctuate over the next few days, it is forecast to remain a Category 4 or stronger hurricane as it draws closer to Florida. Irma is a massive storm. Hurricane-force winds extend up to 70 miles from its center, and tropical-storm-force winds are being experienced on a radius of 185 miles. Cuba, the Turks and Caicos Islands, and the Bahamas will face wind hazards, storm surge of 15 to 20 feet, and heavy rainfall through Saturday.

Reported Impacts

Hurricane Irma caused catastrophic damage as it passed through Antigua and Barbuda, St. Kitts and Nevis, Anguilla, St. Martin, St. Barts, and the British and U.S. Virgin Islands. It is still too soon for the full extent of damage to be known, but it is clear that there has been extensive damage to buildings and infrastructure, roads are blocked, many people have been rendered homeless, and thousands of tourists are stranded.

While Antigua escaped comparatively unscathed, nearby Barbuda has been devastated, with most buildings damaged. On Anguilla the airport, hospitals, and schools have been seriously damaged and 90% of roads are blocked. There are reports of serious looting on St. Martin, where the Princess Juliana Airport is said to be badly damaged. Several nations have already deployed military personnel to the area to deliver aid, repair infrastructure, and where necessary, restore order. At least 16 people are reported dead across the Caribbean, but that number is expected to rise.

Passing just to the north of Puerto Rico the Dominican Republic, and Haiti, Irma delivered powerful winds and heavy precipitation. Flooding, widespread power outages, and damage to vegetation are reported, but no widespread or severe property damage. In Puerto Rico, where up to 15 inches of rain were expected, up to a million people lost power but 40% of the nation’s hospitals are functioning with the help of generators. Irma is now impacting the Bahamas, which implemented an unprecedented evacuation of six southerly islands ahead of the storm, and Cuba, which is bracing itself for flooding, and damage to buildings and crops

U.S. Preparations

Hurricane and storm surge warnings and watches extend from the Bahamas through central Florida. A complete list of current hurricane and storm surge warnings and watches can be found on in the latest Public Advisory for Irma from the National Hurricane Center (NHC).

Preparations in Florida began early this week with initial mandatory evacuations for visitors of the Keys, which were then extended to residents. By Thursday morning, the Florida governor had ordered mandatory evacuations for more than 650,000 people in Miami-Dade County—the first mandatory evacuation for Miami-Dade in 12 years, which is expected to be the largest ever attempted. Mandatory evacuations have also been ordered in the Tampa area and Palm Beach Island, and voluntary evacuations have been ordered for the southern half of Lake Okeechobee, as well as Palm Beach and Glades counties. To help with evacuations, sheltering, and the aftermath, 7,000 members of the Florida National Guard were activated on Thursday, September 7.

Stores throughout Florida have been cleaned out and nearly a third of Florida gas stations are reportedly out of gas, forcing the state highway patrol to escort in extra tanker trucks to help evacuees refuel. The governor said fuel cannot be safely resupplied until after Irma strikes once Port Everglades closes on the evening of September 8.

A public health emergency has been declared in Florida, as well as Puerto Rico and the U.S. Virgin Islands. Multiple hospitals, health care facilities, and prisons in the projected path have been evacuated. Florida cruise lines canceled or changed itineraries due to the approach of Irma. Flights out were largely sold out, though airlines added extra flights in Miami, Orlando, West Palm Beach, and Fort Lauderdale airports. By late Saturday many airports will be shut down for safety.

At least two nuclear plants in Florida were shut down as a precautionary measure: the Turkey Point plant and the St. Lucie plant. The U.S. Army Corps of Engineers drew down the levels in Lake Okeechobee and inspected the dam for safety. The South Florida Water Management District lowered water levels in canals as they plan for flooding and storm surge dangers. Of note, relative sea level on the Miami coast has risen 3.3 inches since Hurricane Andrew struck the area 25 years ago, and Miami-Dade County’s population has grown 35 percent.

The Georgia governor declared a state of emergency in at least six coastal counties, and issued mandatory evacuation orders for the City of Savannah and surrounding Chatham County. The South Carolina governor said Thursday that he expects to order mandatory evacuations for coastal areas starting at 10 a.m. ET on Saturday, September 9, although an official order has not yet been set.

Farmers and food companies in the projected path are scrambling to protect machinery, processing facilities, livestock, and resources; as well as stock up on supplies. Many are concerns that cotton fields in North and South Carolina and Texas could be further damaged after taking a reported USD 150 million hit from Hurricane Harvey. The Florida Department of Agriculture and Consumer Services said there was nothing that could be done to protect sugar cane fields and orange groves. Known for cotton, grain, and livestock, agriculture in the Carolinas and Georgia may be affected by Irma if the projected path holds.

Florida Exposure at Risk

In Florida, close to 80% of the total insured value is located in coastal counties, where the amount and value of exposure has been growing significantly for decades. The Miami metropolitan area has the highest population concentration in the southeastern region. Since Hurricane Andrew in 1992, Florida’s building codes have been continually revisited and improved after damage from subsequent hurricanes, and are now the strictest in the country for hurricane damage resistance.

The state’s codes since 2002 have been based on the International Building and Residential Code. Building structural capacities appeared to have improved since Hurricane Andrew because of stronger building codes and better enforcement, resulting in less structural damage overall even from intense hurricanes during the 2004-2005 hurricane season. Because of these enhancements, AIR expects newer structures in the region will perform better than older structures.

Residential construction in Florida is dominated by wood-frame and masonry construction; for the same building code, the latter is typically more resistant to high winds in comparison to the former. Modern timber Construction can be less vulnerable than masonry construction from older codes. As in the case of the 2004 hurricane season, significant damage may be expected to roof covers related to installation and attachment methods. Manufactured homes are vulnerable to significant damage during hurricanes and their performance tends to be a function of age and of the regulations under which the home was constructed and installed.

Forecast Track and Intensity

p02_irma_5pm.jpg 

Track map for Hurricane Irma issued at 5 p.m. ET, Friday, September 8. (Source: NHC)

 Hurricane Irma is forecast to continue moving toward the west-northwest at about 14 mph for the next day or so, with its forward motion slowing as it progresses.  It is expected to be turning to the northwest by late Saturday and to be approaching the Florida Keys and the southern Florida Peninsula as a powerful Category 4 hurricane on Sunday morning.

Hurricane Irma
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