The Bahamas felt the full-force of Dorian as a strong Category 5 storm, resulting in significant damage for some islands, while the Florida coast is now at-risk of hurricane force winds, storm surge and torrential rains as Dorian curves northwards.
Industry loss estimates are currently sitting in a range from $10 billion to as much as $25 billion (perhaps even $30 billion according to some new runs we’ve seen), which aligns with these analogue storms RMS has highlighted.
CoreLogic analysis shows that 668,052 single-family and multifamily homes along the east coast of Florida, with a combined reconstruction value (RCV) of $144.6 billion, are at potential risk of storm surge damage from Hurricane Dorian making landfall as a Category 3 storm.
Hurricane Dorian made landfall in Elbow Cay, Abacos, Bahamas, with sustained wind speeds of 185 mph and gusts of 220 mph, causing significant damage from this major Category 5 status storm. The storm is currently impacting Grand Bahama Island with 200 mph wind gusts and a significant storm surge.
Hurricane Dorian analogue storms from the past, so major category 3 and 4 hurricane landfalls in Florida with similar tracks, show a range of $11.3 billion to $37.2 billion of insurance and reinsurance industry losses, according to RMS.Since then Dorian has weakened slightly to 165 mph winds and the minimum central pressure has risen from its low at 910mb to now 916mb.
Hurricane Dorian continues to track towards a Florida landfall, with significant time left to strengthen over open warm seas. Reports suggest that further intensification of Dorian is almost assured and the forecasts still present a roughly Category 4 major hurricane at landfall on Florida’s east coast on Monday.
The potential for Dorian to impact much of the U.S. eastern seaboard as it travels north is real.
However weakening is not forecast to begin in earnest until Dorian has tracked further north, so interests in Florida need to remain alert to hurricane Dorian’s potential to shift its track any further west and come closer to the coast.
The next 48 hours or so will require a close watch on hurricane Dorian as it slowly turns and progresses north.Georgia, South and North Carolina will all feel the effects of hurricane Dorian as it travels north.
Clearly, risks still exist for the insurance, reinsurance, insurance-linked securities (ILS) and catastrophe bond markets. The Bahamas will drive a significant insurance loss and reinsurance firms will likely assist in local insurers payments of claims.The uncertainty over hurricane Dorian’s track and how impactful it will be in Florida and northern states makes modelling a potential insurance and reinsurance market loss challenging at best.
Eve as, Hurricane Dorian continues to churn towards the Bahamas and Florida with winds at high Category 2 strength.it has now resulted in some catastrophe bond market activity, with a number of trades completed as certain insurance-linked securities (ILS) funds or investors look to reduce their Florida exposure.