Hurricane Ida roared ashore in Louisiana yesterday, with sustained winds of 150 mph and higher gusts after the hurricane rapidly intensified on approach to land. Ida remains a hurricane at this time and is now soaking the state, while still causing damage.
Hurricane Ida’s winds gained 65 mph in strength in just 24 hours as it crossed the Gulf of Mexico, reaching almost Category 5 strength and also growing in size.
Impacts have been significant to parts of southern Louisiana, with barrier islands and key energy facility Port Fourchon receiving a direct hit.
Having rapidly intensified, as hurricane Ida made landfall it also slowed down considerably, resulting in Category 4 winds being sustained for some hours after the eye had made landfall and a very slow weakening as Ida moved north.
This will have extended the length of time some areas experienced major hurricane force winds, while also expanding the area affected by these peak winds and wind gusts, all of which will increase the ultimate loss for the insurance and reinsurance industry.
Hurricane Ida has also brought significant rains with it, with flood risks seen as severe and the slow pace of the storm set to exacerbate that over the coming hours and days.
Hurricane Ida’s track jogged slightly east as it approached its landfall, which threatened to take stronger winds into the metropolitan area of New Orleans.
But, while New Orleans did experience hurricane force winds from the right front quadrant of hurricane Ida, the impacts appear not to have been quite as severe as they could have been, although damage is widespread.
But, set to challenge New Orleans over the coming days and weeks, the main power transmission source to the city is down, so New Orleans is on generators only for now.
In fact, close to one million power customers are thought to be without power across Louisiana, which will lead to challenges in the insurance claims process.
Mold is already being cited as a possible issue that could inflate insurance claims, given the high rainfall levels and flooding seen and now the loss of power as well.
Ida is still a hurricane at this time as it heads north, now some fourteen hours since landfall.
That gives an idea of how long parts of Louisiana have been experiencing hurricane conditions, as well as the size of the area affected.
Rainfall related impacts continue and will do so as Ida moves north, while surge will start to reduce and winds are soon going to drop below hurricane force. That does still mean that damaging wind gusts are possible through the coming hours though.
So, what of the impact for the insurance industry and potential impacts for reinsurers?
Our sister publication Artemis covered hurricane Ida though Sunday, highlighting the importance of the landfall location to the eventual size of the industry loss.
Industry sources suggest that the overall insurance and reinsurance market loss from hurricane Ida will almost certainly be in the double-digit billions of dollars, possibly closer towards $20 billion.
But, it is still very early with hurricane Ida still churning over Louisiana and insurers are going to face a challenging claims environment to work in, with some factors evident that could amplify losses and drive loss creep further down the line.
Add in the challenges for claims professionals and adjusters in working in a pandemic environment, in one of the states with a particularly high case rate at this time, and it’s clear the recovery from Ida will not be a simple catastrophe claims affair.
So, it is very early to be making estimates at this stage and any estimate given today is likely to have a very wide range attached, or prove inaccurate further into the future.