Reinsurance News

RMS places hurricane Hanna insured losses at less than $400mn

31st July 2020 - Author: Katie Baker

Catastrophe risk modeller and solutions company, RMS, estimates that the U.S. insurance losses from Hurricane Hanna will not exceed $400 million.

hurricane hanna image

Source: NOAA

Losses to the National Flood Insurance Program are expected to be $100 million or less.

Jeff Waters, senior product manager, RMS North Atlantic Hurricane Models commented: “Wind and storm surge-driven losses for Hanna are expected to be consistent with losses projected by RMS’ HWind forecast product suite prior to landfall.”

He continued: “The storm made landfall in southern Texas as a Category 1 hurricane with stronger winds than expected. However, the impacted region is an area with low industry exposure”.

Business interruption and property damage are included in the estimate which RMS have provided, along with wind-driven damage to offshore oil and gas platforms in the western Gulf of Mexico.

However, offshore platform loss accounts for a small fraction of the overall piece of insured loss.

It also includes wind-driven damage to offshore oil and gas platforms in the western Gulf of Mexico; however, offshore platform loss constitutes a small fraction of the overall insured loss.

RMS have said that inland flood losses are likely to be relatively low due to the length and area which the storm has covered. Because the storm maintained forward motion, it caused high rainfall totals in isolated areas.

After making landfall, Hanna travelled southwest, weakening rapidly as it impacted mountainous terrain. By Sunday, Hanna had weakened to a tropical storm as it passed into Mexico.

The solutions company expects losses to the NFIP to represent approximately USD $100 million or less of the total insured loss estimate.

The majority of locations that have been impacted by Hanna are in Texas, which has the second highest number of NFIP policies-in-force.

Hurricane Hanna was the eighth named storm of the 2020 North Atlantic hurricane season and the earliest eighth named storm on record. It made landfall on Saturday, July 25, 2020 on Padre Island, Texas as a Category 1 hurricane on the Saffir-Simpson Hurricane Wind Scale with maximum sustained winds of 90 mph (150 km/hr).

These estimates from RMS have come in after catastrophe risk modeller KCC, put Hurricane Hanna insured losses at close to $350mn.

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