Status: Closed
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Post Landfall 2 |
11/12/2008 7:36:00 AM |
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Post Landfall 1 |
10/21/2008 11:00:00 AM |
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Landfall |
9/13/2008 11:00:00 AM |
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9/12/2008 9:30:00 AM |
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Pre-Landfall 3 |
9/11/2008 9:00:00 AM |
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Pre-Landfall 2 |
9/10/2008 7:30:00 AM |
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Pre-Landfall 1 |
9/9/2008 8:00:00 AM |
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Landfall | Summary
Posting Date: September 13, 2008, 11:00:00 AM
Hurricane Ike made landfall at Galveston, Texas at 3:10 am EDT, Saturday, September 13, as a strong Category 2 hurricane. Maximum sustained winds at landfall were 110 mph, just shy of Category 3 on the Saffir-Simpson intensity scale.
As of 11 am EDT, Saturday, September 13, Ike is located about 20 miles north-northeast of Huntsville, Texas. Maximum sustained winds have fallen to 80 mph and the storm is moving to the north at 16 mph.
Early damage reports include the destruction of the famed 61st Street Pier in Galveston, along with several other buildings lining the seawall. Several house fires in Galveston burned unchecked as firefighters were prevented from reaching them because of flooded streets and homes across the island are reported to have been damaged by Ike’s winds.
In Houston, the streets are littered with shards of glass from high-rise commercial buildings. Most of the windows up to about the 30th floor were blown out on one side of the JP Morgan Chase building—the tallest in Texas. There is widespread tree damage and nearly 4.5 million utility customers in the Houston area are reported to be without power. Airports in the region remain closed.
Hurricane Ike, which was an extremely large storm at landfall, has been weakening only slowly and has maintained a wide swath of damaging winds since. AIR expects wind damage to be widespread, not only along the coast, but also extending well over 200 miles inland from Galveston.
AIR expects significant damage to mobile homes and light metal construction, such as warehouses. Ornamental features, such as those found on many fast food restaurants, are likely to sustain significant damage. Single-family homes away from the immediate coast are likely to experience damage to roof coverings and non-structural elements. Closer to the coast, Ike’s winds may breach roofs or windows, leading to structural damage.
AIR expects significant damage to glazing in Houston’s high-rise commercial buildings. Wind speeds increase with height. For a given storm at a given location, a low-rise building may experience Category 1 wind speeds, while the upper floors of a 20-story building may experience winds corresponding to a Category 3 or even Category 4 hurricane. However, because such buildings are well-engineered and built to stringent code, AIR does not expect significant structural damage. (Clients should note that there are specific damage functions in CLASIC/2 for plate glass that can be used for accurate modeling of the plate glass exposure.)
On the other hand, while high-rise apartments and condominiums usually receive a similar degree of engineering attention as high-rise commercial construction, they often have building components that make them more susceptible to windstorms, including balconies, awnings, and double sliding glass doors. These components are less engineered at the design and construction stages and hence lead to greater vulnerability as compared to commercial construction.
Flooding continues to be a major concern. After the Galveston hurricane of 1900, the entire city of Galveston was raised some 20 feet above sea level and a 17 foot seawall was built. Today, as a result of subsidence, the seawall measures some 15.6 feet above sea level.
Over the course of the last several days, the NHC had been warning that Ike would bring a storm surge of up to 20 feet. However, in information released this morning, a spokesperson from the National Weather Service reported that the highest surge was 13.5 feet, seen at Sabine Pass, TX. Galveston Island recorded an 11 foot surge.
Nevertheless, waves have been crashing over the seawall and flooding has been reported across Galveston Island, including in the city’s downtown; according to local officials, six feet of water had collected in the Galveston County Courthouse. Both the east and west ends of Galveston Island are reported to be under water. AIR estimates that the total value of insured properties on Galveston Island alone is about $12 billion, divided roughly equally between commercial and residential construction. It should be noted, however, that much of the flood damage will not be covered by the private insurance industry.
Flooding is also expected to occur along the coasts of the many small bays and estuaries to the east of Ike's landfall location and extending well into Louisiana. Near Houma, Louisiana—which felt the force of Hurricane Gustav less than two weeks ago—surge from Ike is reported to have breached levees and flooded more than 1,800 homes. Of concern are the many oil and chemical industrial facilities along the Texas coast, though Ike’s lower than expected surge heights is undoubtedly good news. Note that AIR’s industry exposure database used to develop industry insured loss estimates includes a comprehensive database of industrial facilities broken down by building, equipment, inventory, contents and business interruption.
If forced up the Houston Ship Channel, the port of Houston—the nation's second busiest—could sustain significant flood damage. Additionally, several bayous make their way through the city itself and low-lying neighborhoods could be threatened.
It is still in the early aftermath of Hurricane Ike. AIR will be sending survey teams to the affected areas and make their findings available to clients.
AIR estimates an expected (mean) insured industry loss to onshore U.S .property exposures from Hurricane Ike of $10 billion, with a 90% confidence interval of $8 billion to $12 billion.
AIR’s expected, or mean, loss is truly the expected value of the full loss distribution and will not exactly match the “50% probability loss” in the posted scenarios, since the latter is the median loss scenario.
Note that while the range of losses is considerably narrower than yesterday’s, AIR still provides a range. It is important to note that there is still uncertainty with respect to Ike's actual meteorological parameters and surge height, and its future track as it makes its way inland.
There is also uncertainty around take-up rates for storm surge coverage for commercial exposures. To the extent the overall commercial take-up is higher than 10%, the insured industry loss estimates could increase by another 1 billion dollars. However, CLASIC/2 does offer the ability to code which policies cover storm surge losses, so individual insurers should be able to get accurate storm surge loss estimates provided they code their exposure data properly.
Specifically, note that storm surge coverage may be a sublimit and thus have different deductibles and limits than the wind or fire cover. In CLASIC/2, clients can explicitly code which policies cover surge, and thus apply 100% of the surge loss to that property. Clients can also enter the policy terms, including sublimits, to handle the surge component as well as the wind component. For policies that include surge coverage, simply applying 10% of the surge could easily lead to underestimated losses.
AIR’s loss estimates reflect:
• Insured physical damage to property (residential, commercial, industrial, auto), both structures and their contents;
• Additional living expenses (ALE) for residential claims;
• For residential lines, estimates reflect AIR’s view that insurers will ultimately pay 10% 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, assuming a 10% take-up rate for commercial flood policies (Note: Other flood losses are not modeled or reflected in estimates);Business interruption losses include direct and indirect losses for insured risks that experience physical loss;
• Demand surge.
Loss estimates do not reflect:
• Losses from scenarios in which the cyclone makes landfall at tropical storm strength;
• Losses resulting from the compromise of existing defenses (e.g., levees);
• Losses from flooding;
• Losses to uninsured properties;
• Losses from inland marine and pleasure boat coverages;
• Losses to infrastructure;
• 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;
• Losses for U.S. offshore assets and non-U.S. property (AIR estimates these losses separately).
As clients review their estimated losses from this storm, AIR recommends the following best practices to enhance the interpretation and communication of results:
• Always communicate the range of loss estimates produced by the “All simulated scenarios” event sets provided on the ALERT site, not just any single estimate or just the maximum;
• Always make sure the loss results include demand surge;
• Confirm that any storm surge losses from CLASIC/2 are based on correctly coding policies with respect to whether they cover such losses;
• Benchmark estimated losses against losses based on market share information and industry loss estimates when appropriate;
• Present any known issues with exposure data quality that might affect the loss results;
• Disclose any adjustments made to reflect non-modeled costs such as loss adjustment expenses, wind pool assessments, and inland flooding.
Landfall | Downloads
Posting Date: September 13, 2008, 11:00:00 AM