Hurricane Irma

Post Landfall 1 | Summary
Posting Date: September 15, 2017, 9:30:00 AM

AIR's updated estimates of combined insured losses for Hurricane Irma for the U.S. and Caribbean are between USD 32 billion and USD 50 billion.

AIR’s estimated industry insured losses for the United States resulting from Hurricane Irma range from USD 25 billion to USD 35 billion. These losses include wind and storm surge damage to onshore residential, commercial, and industrial properties and their contents, auto, and time element coverage (additional living expenses for residential properties and business interruption for commercial properties). Note, however, that AIR continues to investigate the implications of prolonged power outages on time element losses from Irma, which affected nearly the entire state of Florida. If our analysis suggests that additional living expenses and business interruption losses will be higher than currently estimated, AIR will notify clients. See below for additional information on what is captured in these estimates.

For the Caribbean, AIR’s estimated industry insured losses resulting from Hurricane Irma range from USD 7 billion to USD 15 billion. These losses include wind and precipitation-induced flooding damage to onshore residential, commercial, and industrial properties and their contents, auto, and time element coverage (additional living expenses for residential properties and business interruption for commercial properties). This will be AIR’s final posting on Irma’s impacts in the Caribbean. See below for additional information on what is captured in these estimates.

United States

AIR’s estimated industry insured losses for the United States resulting from Hurricane Irma range from USD 25 billion to USD 35 billion. These losses include wind and storm surge damage to onshore residential, commercial, and industrial properties and their contents, auto, and time element coverage.

Please note that there are potentially significant sources of loss that are not included in the AIR estimates. These include loss adjustment expenses (LAE), which may be substantially higher for this storm than would otherwise be the case because of Hurricane Harvey’s landfall just two weeks prior, which has resulted in a shortage of available adjusters. Damage to pleasure boats is also not included in these estimates, and these losses are likely to be significant. Litigation expenses associated with Florida’s “Assignment of Benefits” are also not modeled and therefore not included in the estimates.

AIR estimates do include time element losses—that is, additional living expenses for residential properties and business interruption for commercial properties. However, Hurricane Irma’s winds and storm surge affected virtually the entire state of Florida, an unprecedented situation, and power outages are likely to be prolonged beyond what the model would ordinarily anticipate. Florida Power and Light, the largest supplier in Florida, has said that they expect to restore power to most customers along Florida’s east coast by September 18; customers on the west coast may have to wait until September 23, while isolated locations impacted by tornadoes or severe flooding may have to wait still longer. AIR is currently analyzing the potential impacts of these outages and will release findings to AIR clients when they become available.

In addition, it should be noted that the “leakage” of storm surge losses into wind policies may be greater than the 5% assumed by AIR (per the caveats listed below) because of the delay in allowing home and business owners back into their properties, thus delaying the necessary steps to protect them from damage.

See below for additional information on what AIR’s loss estimates capture.

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
• Time element losses (additional living expenses for residential properties and business interruption for commercial properties) subject to the caveats discussed above
• 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 auto line of business, estimates reflect AIR’s view that insurers will pay 100% of the storm surge damage
• 2017 indexed take-up rates
• Demand surge

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

• Losses paid out by the National Flood Insurance Program (NFIP)
• Losses resulting from the compromise of existing defenses (e.g., natural and man-made levees)  
• 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 sources of loss, including those resulting from tornadoes spawned by the storm and loss adjustment expenses, among others
• Losses for U.S. offshore assets and non-U.S. property

Caribbean

AIR's estimated industry insured losses for the Caribbean resulting from Hurricane Irma range from USD 7 billion to USD 15 billion. These losses include wind and precipitation-induced flooding damage to onshore residential, commercial, and industrial properties and their contents, auto, and time element coverage (additional living expenses for residential properties and business interruption for commercial properties). These will be AIR’s final loss estimates for Irma’s impacts in the Caribbean.

AIR’s modeled insured loss estimates for 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
• 2017 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
• Demand surge

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

• Losses to infrastructure
• Losses from hazardous waste cleanup, vandalism, or civil commotion, whether directly or indirectly caused by the event
• Other non-modeled losses
• Losses 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

Hurricane Irma Recap

Irma hammered much of Florida on Sunday, September 10, through the next day, with rain and winds that ripped off roofs, downed trees, caused widespread power outages, and flooded towns. Most of Florida was in peril due to the massive size of the storm, as hurricane-force winds extended 80 miles from the eye, and tropical storm–force winds extended more than 400 miles, covering the entire state and driving storm surge into both the Atlantic and Gulf coasts. After making its first landfall in Barbuda at Category 5 strength on September 6, Hurricane Irma left a trail of destruction in the Caribbean, moving north and west across islands such as St. Kitts and Nevis, Anguilla, St. Martin/St. Maarten, St. Barts, and the British and U.S. Virgin Islands. Irma made a second landfall on Cuba’s northern coast as a Category 5 storm on Friday, September 8. The interaction with Cuba’s northern coast weakened Irma to a Category 3 before a trough of low pressure turned Irma northward on Saturday, September 9.

As Irma moved north toward the Florida Keys on Saturday night, it reintensified, making an initial U.S. landfall at 9:10 on Sunday morning on Cudjoe Key at Category 4 strength, with maximum sustained winds of 130 mph. Key West and other islands west of Cudjoe Key in the Florida Keys were spared the very worst of the damage from the hurricane’s right-front quadrant, which had the highest winds and surge potential.

Beginning to be impacted by increasing vertical shear, the storm weakened to Category 3 again before it made a second U.S. landfall on the southwest coast of Florida at Marco Island, just south of Naples, at 3:35 p.m. on Sunday. Maximum sustained winds at landfall were 115 mph, according to the NHC. Miami avoided the direct hit that was feared as Irma had shifted farther west; although the storm still lashed the city with dangerous winds, rain, and some storm surge, damage was not as catastrophic as had been expected a couple of days earlier. The relentless storm surge did cause saltwater, sand, and mud to spill onto roads and into the first floors of some businesses and homes.

Irma continued moving north, passing over Naples before weakening to a Category 2. The storm moved inland on Sunday evening, sparing Tampa a direct hit. Overnight, Irma passed west of Orlando, lashing the middle of the state with high winds and torrential rain. Tornado warnings were issued across several central and eastern Florida counties, and at least two tornadoes touched down briefly, damaging a trailer park in Brevard County.

On Monday morning, September 11, Irma—now downgraded to a tropical storm—brought heavy rain and storm surge to Jacksonville on Florida’s northeast coast. As a result of the heavy rainfall that fell in the Jacksonville, Orlando, and other adjoining areas, as well as storm surge preventing water from draining out of the St. John’s River for multiple tidal cycles, many river gauging stations in the National Weather Service Jacksonville Weather Forecast Office region area experienced major flooding stages. Jacksonville saw the worst flooding in the last 60-plus years as the St. Johns River, which flows through its downtown area, was hit by the double whammy of storm surge and high tides on one side and very heavy precipitation and resulting high river flows from its catchment on the other. St. Johns River crested at 5.57 feet, about 1.5 feet higher than its previous record set in 1964. Cedar River at San Juan Avenue in Jacksonville that flows into the St. Johns River also broke its historic flood record set in 2004.

Figure 1: Very heavy precipitation that fell around Jacksonville and other parts of Florida just in 24 hours through 8 a.m. on September 11. (Source: National Weather Services)

Figure 2: Observed river flood stages at two river gauging stations in and around Jacksonville downtown area as of the morning of Sept 13. (Source: National Weather Services

Irma then passed east of Tallahassee around 2 p.m. Monday before pushing into Georgia, where it downed trees and power lines, and caused flooding and storm surge in Savannah, as well as in Charleston, South Carolina. The Charleston Harbor tide gauge topped the level reached there during Hurricane Matthew last October, and also hit its third-highest mark on record.

By Tuesday morning, September 12, Irma was declared a post-tropical cyclone as it moved into Alabama.

Reported Impacts

Caribbean

Hurricane Irma caused catastrophic damage as it passed through Antigua and Barbuda, St. Kitts and Nevis, Anguilla, St. Martin/St. Maarten, St. Barts, and the British and U.S. Virgin Islands, leaving buildings in rubble. Roads remain blocked, many people have been rendered homeless, and thousands of tourists were stranded. Irma killed at least 38 people in the Caribbean, including 10 in Cuba, although many are still missing in the worst-hit islands.

Several nations have deployed military personnel to the area to deliver aid across the Caribbean, repair infrastructure, and where necessary, restore order. Evacuations are under way on many islands, with priority being given to tourists and vulnerable populations. Two cruise lines sent ships to provide relief supplies and help with evacuations. Overall efforts have been hampered by damaged roads and by a communications infrastructure in shambles. Plant life has been scoured away, and fishing fleets were wrecked, further adding to food shortage issues. Supplies are reportedly short, including gas necessary for transportation; generators; and heavy machinery to help move debris.

While Antigua escaped relatively unscathed, nearby Barbuda was devastated, with 95% of its buildings reportedly either damaged or destroyed. The population of 1,500 is homeless, with most moved to shelters in nearby Antigua, which escaped the worst of the storm's impact. Rebuilding homes and infrastructure could take at least six months, officials have said, and would require hundreds of millions of dollars in international aid. These two islands have had far fewer instances of looting and violence than nearby St. Maarten, where more than 1,200 U.S. citizens were evacuated for safety to Puerto Rico.

The U.S. Virgin Islands of St. Thomas and St. John experienced catastrophic damage to infrastructure, businesses, and homes, although St. Croix received relatively minor impacts. St. John is reported to have had 80% of its structures destroyed, including the only hospital, and officials say it may be months before power and other services are restored. President Trump has declared a state of emergency and a national disaster there as well as in Puerto Rico, where Irma passed just to the north. Flooding, widespread power outages, and damage to vegetation due to high winds were reported in Puerto Rico, but no widespread or severe property damage. More than a million people lost power, although some hospitals continued aided by generators. U.S. Marines were sent to the Virgin Islands and Puerto Rico to help with recovery. Power, water, and cell service are slowly returning to Puerto Rico.

Irma then continued past the Bahamas, where it delivered a lighter blow to Nassau but inflicted much more damage to the southeast, including the Turks and Caicos Islands, where reports have indicated widespread damage to the infrastructure, particularly in South Caicos.

In Cuba, more than 1 million people evacuated ahead of the storm. The provinces hardest hit by Hurricane Irma include Camaguey, where the storm made landfall, as well as Ciego de Avila, Sancti Spiritus, Villa Clara, and Matanzas. Reported damage includes downed trees and utility poles, ripped off roofs, and some instances of collapsed buildings. Flooding from storm surge is widespread, including significant damage to low-lying parts of the capital of Havana.

Florida Keys

Hurricane Irma lashed the Florida Keys with extreme winds and torrential rains, its center passing just 20 miles east of the popular tourist destination of Key West. The low-lying islands are extremely susceptible to damage from storm surge; the single road that connects the islands to mainland Florida was ordered closed on Sunday. This road was partly opened Tuesday and fully open Wednesday after a safety inspection of each of its 42 bridges.

While a mandatory evacuation was ordered ahead of the storm, many residents chose to stay, and authorities fear a humanitarian crisis. Emergency personnel were allowed in first and have been conducting house-to-house search and rescue operations, along with victim identifications. A U.S. Air Force relief mission was sent via cargo planes to the Keys, and U.S. military from across the country were deployed to assist in rescue efforts.

Along with downed trees and flooding, at least a quarter of the islands' houses were completely destroyed, and 65% suffered major damage, according to official estimates. The islands north of Key West to Marathon suffered the worst damage. Many boats were washed ashore or sank. Trailer parks had homes overturned or torn to shreds. The Lower Keys are without power, although the Upper Keys were at 30% as of the morning of September 13. It will be days or weeks before water, sewer, and electricity are fully restored.

Mainland Florida

An estimated 6.5 million people evacuated from coastal danger zones, with another 160,000 in local shelters, and they are slowly returning to assess damage to their homes and businesses. Across Florida, downed trees, signs, and utility poles and flooded or debris-strewn streets are common, particularly in the southern regions. Wind damage to homes and businesses ranged from moderate to catastrophic.. Trees falling on homes, damage to cars, and occasional structure fires have been reported.

Strong winds in Miami, with gusts up to 95 mph, toppled two construction cranes, tore up trees, and blew out windows from high-rises. After a massive storm surge, streets in parts of the Brickell Financial District, which is on Biscayne Bay, were flooded. First floors of homes and businesses took on saltwater and mud in several areas, including the Hollywood and Edgewater neighborhoods, and the enclaves of Coral Gables and Palmetto Bay. Ocean Drive in South Beach was left covered in deep sand, making it impassable until plowed. Evacuated Miami residents were permitted to return on the morning of September 12, and although the city was littered with debris and street signs, and businesses and homes experienced damage, the area appeared to escape the worst Irma had to offer.

The Port of Tampa Bay, one of Florida's biggest and busiest ports, had remarkably low levels of damage, given how close it was to Irma’s eye. Many ports across Florida were closed through Monday, September 11. This blocked many tankers, contributing to shortages of fuel. Tampa received only a glancing blow, being spared Irma’s strongest winds. Nearby areas were harder hit. The roof of a senior center in Clearwater was blown off to land on nearby cars. A small cruise ship crashed into a bridge in St. Petersburg. Flooding, blown down power lines, and torn up trees were widespread, closing some roads.

President Trump has approved a major disaster declaration for Florida. Around 6.7 million customers across Florida lost power, but by midday on September 12, Florida Power & Light Co. had restored power to 40% of those affected. The company stated Monday that they have “the largest restoration workforce in U.S. history” working currently, bringing in electricians from as far away as Canada. FPL officials stated that electric system along Florida's east coast will require more traditional repairs, but southwestern region will require a complete rebuild.

Irma’s massive wind field caused destructive storm surges of up to 15 feet high across Florida coasts. Storm surges in some parts of northern Florida up to coastal South Carolina have exceeded previous records from Hurricane Matthew. A coastal flood warning remained in effect for northeast Florida until 12 noon EDT September 14. River flood warnings remained in effect for several counties across the state.

As seen in Figure 1, heavy rain fell across Florida, including in Okeechobee, the site of a deadly post-hurricane flood in 1928. The Army Corps of Engineers has tested the dikes at Lake Okeechobee and deemed them safe. However in Jacksonville, the flash flooding and storm surge combined to fill the streets with water, covering cars and damaging buildings, as people were rescued from flooded homes. Authorities said the flooding there could continue for days as the storm surge persists, with upstream river water trying to flow back into the ocean. As waters have begun to recede, some residents have found the contents of their homes washed onto sidewalks. Other flood damage there came from trees falling on homes, and officials warned that some trees might still fall because of saturated soil.

Orlando received sustained winds over 60 mph and heavy rains, forcing Disney to close its parks Sunday and Monday—only the fifth time in 46 years—and they reported limited damage. Universal closed its park doors as well, but each reopened on Tuesday.

Tourism is a major part of Florida’s economy, and many tourists were forced to cancel plans in advance of the storm. Future impacts will be felt as many businesses and attractions report needing major repairs, with some unable to open for months.

Airports resumed most flights by Tuesday, September 13; however, they are still assessing damage, and hundreds of delays and cancellations are reported. Personnel shortages are an issue, as many evacuated workers had not yet returned, and overnight flight crews are finding hotels are closed or full.

Florida agriculture received a severe blow from Irma. Over half of the citrus crop was blown down in those regions in Irma’s path, and trees suffered flooding damage throughout the state. The sugarcane fields, the source of a quarter of U.S. sugar production, were knocked down, and the harvestable amount is still unknown. Housing for migrant workers has been severely damaged or destroyed.

Georgia, Alabama, South Carolina, and North Carolina

Irma’s heavy rain and tropical storm–force winds caused flooding, downed trees, and widespread power outages in Georgia, Alabama, South Carolina, and North Carolina—particularly in coastal areas. Many schools were forced to close. Mandatory evacuations were in place in several regions, and potential damage to homes may not be known until residents return. The Governor of Georgia declared a state of emergency for all counties on Monday, September 11, as Irma’s winds covered the state, and two people in Metro Atlanta died due to falling trees. Nearly 600,000 homes remained without power on Wednesday.

Storm surge along the Atlantic Coast caused significant impacts, as it combined with the high tide that coincides with the full moon. A storm surge of 10 feet covered Charleston, S.C., up to a mile inland, flooding downtown, swamping cars, and leaving some residents in waist-deep waters. The surge washed away beach dunes only recently restored after Hurricane Matthew 11 months earlier. The storm surge for Savannah, Georgia, and nearby Tybee Island was 4.7 feet, with swells up to 15 feet, covering neighborhoods with deep water.

The AIR tropical cyclone team is currently analyzing the potential impact of extended power outages in Florida on time element losses. AIR clients will be notified of their findings if the estimates are materially different from those included in this posting. AIR has dispatched engineers to the areas impacted by Irma; findings will be released in the coming weeks.

Post Landfall 1 | Downloads
Posting Date: September 15, 2017, 9:30:00 AM