Catastrophe risk modeller RMS has estimated that total insured losses from Hurricane Sally in the US will be between $2.0 billion and $3.5 billion.
The estimate includes losses to the National Flood Insurance Program (NFIP) of between $400 million and $800 million.
The range compares with recent estimates from AIR Worldwide, who put Sally’s onshore losses at between $1 billion and $3 billion, and KCC, who settled for an onshore industry loss of $2 billion.
RMS said its estimate includes wind, storm surge, and inland flood losses across parts of the Gulf and Florida regions, with losses reflecting property damage and business interruption to residential, commercial, industrial, and automobile lines of business.
“Sally made landfall with much stronger winds than expected,” noted Jeff Waters, senior product manager, RMS North Atlantic Hurricane Models.
“While it weakened considerably as it moved inland, the slow-moving nature of the storm brought persistent wind and storm surge to much of the Gulf coastline, combined with heavy rainfall and widespread flooding to interior regions. Sally is another example of how hurricane damage can take many different forms.”
Analysts at AM Best said recently that they do not expect Sally to constitute a major loss for the private re/insurance industry due to its large flood component, which will mainly by covered by the NFIP.
“We expect Sally to be a sizable event for the NFIP,” said Rajkiran Vojjala, Vice President, Model Development at RMS.
“The majority of NFIP take-up occurs in coastal counties, especially in the states most impacted by the hurricane, notably Alabama and Florida,” he explained. “However, the inland extent of heavy rainfall from this event means we’ll likely see NFIP losses stemming from inland flood as well.”
Sally made landfall near Gulf Shores, Alabama on September 16th as a Category 2 hurricane with sustained winds of 105 mph (170 km/h), according to the National Hurricane Center (NHC).
Moving at just three miles per hour after landfall, the NHC described the flooding from Sally as “catastrophic and life-threatening” and hundreds of thousands of residents were left without power.
“In the 24-36 hours following landfall, Sally weakened quickly as it tracked further inland into Georgia and parts of the Carolinas, before being downgraded to a “remnant low” on September 17,” said Pete Dailey, Vice President, Model Development
“In the days leading up to landfall, our HWind forecasts consistently provided clients with scenarios indicating a potential Alabama landfall location, even prior to the NHC official forecasts trending east away from New Orleans. This event is another strong validation point in demonstrating the predictive value of these products.”