Hurricane Dorian has continued to intensify as it tracks northwest towards Florida, with the latest updates from the National Hurricane Center (NHC) showing maximum sustained winds of 110mph.
This puts Dorian towards the upper range of Category 2 status (96-109mph), but the NHC believes that the storm could strengthen to Category 4 (130-156) as it approaches landfall.
Current forecasts suggest that Dorian could build up to wind speeds of 138mph with gust speeds of 167mph on Monday, and maintain this strength through Tuesday, before weakening later in the week.
At present, the storm is due to make landfall on the east coast of Florida around 2am on Tuesday, further to the south than had originally been predicted.
This could be a problem for the insurance and reinsurance industries, as it puts more high-value and highly insured areas in the path of the hurricane, including property around West Palm Beach.
With forecasts now leaving little doubt regarding a Florida landfall, the re/insurance market looks set to take a significant loss, with analysts at Credit Suisse putting potential industry losses at between $10 billion and $30 billion.
Keefe, Bruyette & Woods (KBW) have also suggested that the majority of losses from a major Florida landfall could be borne by reinsurers, rather than the primary insurance market.
Models are now showing Dorian slowing considerably on its path through the Bahamas towards the Florida coastline, with its movement speed slowing from 13mph to 12mph since yesterday.
This raises additional concerns about the potential for a major loss, as hurricane force winds could be sustained for longer over coastal and inland areas, with increased risk of heavy rainfall and flooding.
With these factors in mind, weather forecaster Accuweather has increased its forecast for potential economic damages caused by Dorian from $15 billion to $20 billion.
However, considering that the average economic loss from landfalling Category 4 hurricanes in Florida is around $30 billion, even this estimate could be too low.
Looking at the three Category 4 hurricanes that made landfall closest to the West Palm Beach area, the average historical economic loss is even higher, at around $37 billion.
In more positive developments, the chances of Hurricane Dorian crossing the Florida peninsula in the Gulf of Mexico and making a second landfall have lessened.
But the storm could still shift further south, increasing the potential for a high insured loss, before curving up north and travelling up the peninsula, affecting a large area of the state.
For now, Dorian continues to increase in size, with hurricane-force winds currently extending outward up to 25 miles from the centre, and tropical-storm-force winds extending outward up to 105 miles.
The latest minimum central pressure estimated is 979mb, with the eye diameter at 15nm.
Source: Tropical Tidbits
The NHC released a statement on the projected impact of Dorian: “The risk of life-threatening storm surge along portions of the Florida east coast has increased, although it is too soon to determine where the highest storm surge will occur.
“The risk of devastating hurricane-force winds along the Florida east coast and peninsula early next week has also increased, although it is too soon to determine where the strongest winds will occur.”
It added: “Regardless of the exact track of Dorian, heavy rains are expected to occur over portions of the Bahamas, Florida, and elsewhere in the southeastern United States this weekend and into the middle of next week.”
