AIR Worldwide Estimates Combined Insured Losses for Hurricane Irma for the United States and Selected Islands in the Caribbean Will Be Between USD 20 Billion and USD 65 Billion
BOSTON, Sept. 9, 2017 - Catastrophe modeling firm AIR Worldwide estimates combined insured losses for Hurricane Irma for the United States and selected islands in the Caribbean will be between USD 20 Billion and USD 65 Billion. For the United States, AIR's estimated industry insured losses resulting from Hurricane Irma's wind and storm surge range from USD 15 billion to USD 50 billion. Note that these estimates are based on the NHC's Saturday, September 9, 5:00 a.m. EDT forecast advisory for Irma. For selected islands in the Caribbean, AIR's estimated industry insured losses resulting from Hurricane Irma's wind and precipitation-induced flooding range from USD 5 billion to USD 15 billion. AIR Worldwide is a Verisk Analytics (Nasdaq:VRSK) business.
Irma is currently a Category 3 hurricane with maximum sustained winds of 130 mph. Although its intensity is likely to fluctuate over the next few days, it is forecast to re-intensify to a Category 4 or stronger hurricane as it draws closer to Florida. Irma is a massive storm. Hurricane-force winds extend up to 70 miles from its center, and tropical-storm-force winds are being experienced on a radius of 185 miles.
Hurricane Irma caused catastrophic damage as it passed through Antigua and Barbuda, St. Kitts and Nevis, Anguilla, St. Martin, St. Barts, and the British and U.S. Virgin Islands. It is still too soon for the full extent of damage to be known, but it is clear that there has been extensive damage to buildings and infrastructure, roads are blocked, and many people have been rendered homeless.
While Antigua escaped comparatively unscathed, nearby Barbuda has been devastated, with most buildings damaged. Passing just to the north of Puerto Rico, the Dominican Republic, and Haiti, Irma delivered powerful winds and heavy precipitation. Flooding, widespread power outages, and damage to vegetation are reported, but no widespread or severe property damage. In Puerto Rico, where up to 15 inches of rain were expected, up to a million people lost power. Irma is now impacting the Bahamas, which implemented an unprecedented evacuation of six southerly islands ahead of the storm, and Cuba, which is bracing itself for flooding, and damage to buildings and crops.
Hurricane and storm surge warnings and watches extend from the Bahamas through central Florida. Preparations in Florida began early this week with initial mandatory evacuations for visitors of the Keys, which were then extended to residents. By Thursday morning, the Florida governor had ordered mandatory evacuations for more than 650,000 people in Miami-Dade County-the first mandatory evacuation for Miami-Dade in 12 years, which is expected to be the largest ever attempted. Mandatory evacuations have also been ordered in the Tampa area and Palm Beach Island, and voluntary evacuations have been ordered for the southern half of Lake Okeechobee, as well as Palm Beach and Glades counties.
At least two nuclear plants in Florida were shut down as a precautionary measure: the Turkey Point plant and the St. Lucie plant. The U.S. Army Corps of Engineers drew down the levels in Lake Okeechobee and inspected the dam for safety. The South Florida Water Management District lowered water levels in canals as they plan for flooding and storm surge dangers. Of note, relative sea level on the Miami coast has risen 3.3 inches since Hurricane Andrew struck the area 25 years ago, and Miami-Dade County's population has grown 35 percent.
The Georgia governor declared a state of emergency in at least six coastal counties, and issued mandatory evacuation orders for the City of Savannah and surrounding Chatham County.
Farmers and food companies in the projected path are scrambling to protect machinery, processing facilities, livestock, and resources; as well as stock up on supplies. Many are concerned that cotton fields in North and South Carolina and Texas could be further damaged after taking a reported USD 150 million hit from Hurricane Harvey. Known for cotton, grain, and livestock, agriculture in the Carolinas and Georgia may be affected by Irma if the projected path holds.
According to AIR, in Florida, close to 80% of the total insured value is located in coastal counties, where the amount and value of exposure has been growing significantly for decades. The Miami metropolitan area has the highest population concentration in the southeastern region. Since Hurricane Andrew in 1992, Florida's building codes have been continually revisited and improved after damage from subsequent hurricanes, and are now the strictest in the country for hurricane damage resistance.
The state's codes since 2002 have been based on the International Building and Residential Code. Building structural capacities appeared to have improved since Hurricane Andrew because of stronger building codes and better enforcement, resulting in less structural damage overall even from intense hurricanes during the 2004-2005 hurricane season. Because of these enhancements, AIR expects newer structures in the region will perform better than older structures.
According to AIR, residential construction in Florida is dominated by wood-frame and masonry construction; for the same building code, the latter is typically more resistant to high winds in comparison to the former. Modern timber Construction can be less vulnerable than masonry construction from older codes. As in the case of the 2004 hurricane season, significant damage may be expected to roof covers related to installation and attachment methods. Manufactured homes are vulnerable to significant damage during hurricanes and their performance tends to be a function of age and of the regulations under which the home was constructed and installed.
Hurricane Irma is forecast to continue moving toward the west-northwest at about 14 mph for the next day or so, with its forward motion slowing as it progresses. It is expected to be turning to the northwest by late Saturday and to be approaching the Florida Keys and the southern Florida Peninsula as a powerful Category 4 hurricane on Sunday morning.
AIR's loss estimates for the U.S. include wind and storm surge damage to onshore residential, commercial, and industrial properties and their contents, automobiles, and time element coverage (additional living expenses for residential properties and business interruption for commercial properties).
AIR's Caribbean loss estimates include wind and precipitation-induced flooding damage to onshore residential, commercial, and industrial properties and their contents, automobiles, and time element coverage (additional living expenses for residential properties and business interruption for commercial properties).
AIR continues to monitor Hurricane Irma and will issue updates as warranted.
About AIR Worldwide
AIR Worldwide (AIR) provides risk modeling solutions that make individuals, businesses, and society more resilient to extreme events. In 1987, AIR Worldwide founded the catastrophe modeling industry and today models the risk from natural catastrophes, terrorism, pandemics, casualty catastrophes, and cyber attacks, globally. Insurance, reinsurance, financial, corporate, and government clients rely on AIR's advanced science, software, and consulting services for catastrophe risk management, insurance-linked securities, site-specific engineering analyses, and agricultural risk management. AIR Worldwide, a Verisk Analytics (Nasdaq:VRSK) business, is headquartered in Boston with additional offices in North America, Europe, and Asia. For more information, please visit www.air-worldwide.com.
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Source: AIR Worldwide via Globenewswire