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RMS puts Hurricane Laura’s onshore insured loss at up to $13bn

4th September 2020 - Author: Matt Sheehan

Catastrophe risk modeller RMS has estimated that total onshore US insured losses from Hurricane Laura will be between $9.0 billion and $13.0 billion.

Source: Eric Gay/AP

This includes wind and storm surge losses of between $8.5 billion and $12 billion, inland flood losses of $100 million to $400 million, and NFIP losses of $400 million to $600 million.

Notably, the range is significantly higher than those put forward by other modelling firms, with AIR Worldwide having estimated onshore insured losses at $4 billion to $8 billion, and KCC landing at $9 billion.

But it is comparable to CoreLogic’s estimates, which put insured wind and storm surge losses for residential and commercial properties in Louisiana and Texas at $8 billion to $12 billion.

“Although Laura avoided major metropolitan areas like Houston and New Orleans, it was still an extremely impactful U.S. event,” said Jeff Waters, Senior Product Manager, RMS North Atlantic Hurricane Models.

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“After making landfall as a powerful Category 4 storm, it maintained its intensity as it moved inland, causing widespread wind and water-driven damage well into interior portions of Louisiana,” he explained.

“The extent and severity of these damages has been verified by our development teams via web and aerial-based reconnaissance efforts.”

The RMS estimate includes wind, storm surge and inland flood losses across states impacted by Hurricane Laura, including Louisiana and Texas.

Losses reflect property damage and business interruption to residential, commercial, industrial, and automobile lines of business, as well as post-event loss amplification and non-modeled sources of loss.

Industrial losses include impacts to speciality lines, such as refineries and petrochemical plants, many of which lie along this part of the Gulf coastline.

RMS estimates an additional $1.0 billion to $2.0 billion of insured losses to offshore platforms, rigs, and pipelines in the Gulf of Mexico, due to wind and wave-driven damages.

“Offshore assets have evolved significantly since the impactful hurricanes of Katrina and Rita in 2005 and Ike in 2008, but there is still a prevalence of platforms, rigs, and pipelines in the Gulf region,” said Pete Dailey, Vice President, Model Development.

“Many of these assets, including several high-value deep-water platforms, were exposed to the significant wind and wave impacts from Hurricane Laura,” he continued.

“At landfall, Laura produced devastating sustained winds of 150 mph [240 km/h], according to both the National Hurricane Center and RMS HWind forecasting service. Our forecasts provided clients with estimates of Laura’s potential impacts in the critical days leading up to landfall.”

In the two days following landfall, the system weakened considerably as it tracked further inland into Arkansas and parts of the Ohio Valley. Eventually, Laura became a “remnant low” and merged with a passing extra-tropical system, accelerating eastward off the Mid-Atlantic coast.

Hurricane Laura was the twelfth named storm of the 2020 North Atlantic hurricane season, the first major hurricane of the season, and the third landfalling hurricane of the season.

After landfalling in Louisiana, the storm weakened considerably over the next two days as it tracked further inland into Arkansas and parts of the Ohio Valley

Laura was the Atlantic Basin’s earliest forming twelfth storm on record, and a record seventh named storm to make landfall in the contiguous U.S. before the end of August.

The NOAA expects the Atlantic to remain highly active through the remaining three months of the official 2020 hurricane season.

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