Hurricane Florence has weakened slightly but is still on track towards North and South Carolina. Despite the slow approach, the storm is still expected to result in dangerous impacts, with recent changes in the forecast track suggesting that water is becoming more of a threat to the re/insurance market than wind.
The storm has weakened to maximum sustained winds of 110 mph, making Florence a category 2 storm and lowering the contribution to re/insurance market losses from wind. However, as Reinsurance News reported yesterday, the threat from water is increasing and this component of the loss threat remains high.
According to the latest update, hurricane force winds extend outwards up to 80 miles from the center of Florence, while tropical storm force winds extend outwards 195 miles. Florence is a very large storm and is set to impact a wide area, wherever it comes ashore, hence impacts are expected to be significant.
Global ratings agency Fitch recently highlighted which areas of the marketplace are at risk.
“Primary property/casualty insurance writers across the multi-state forecast landfall area are expected to incur losses primarily from the high winds that are accompanying the storm toward the coast. The threat of extreme flooding has implications for the National Flood Insurance Program (NFIP), private market flood insurers, personal and commercial automobile writers, traditional reinsurers, and Insurance Linked Securities (ILS) markets,” said Fitch.