Insurers escaped relatively lightly from Hurricane Irene’s assault on the US east coast, judging by early loss estimates, but there are more storms on the way.
Risk modelling firm EQECAT estimated insured losses from North and South Carolina of between $200m and $400m after a weaker-than-expected Irene made landfall on Saturday as a category 1 storm west of Cape Lookout. Previous forecasts had suggested it would hit North Carolina as a category 2 storm.
Irene went on to make its second landfall in New Jersey and third in New York before weakening to a tropical storm. Irene had already ripped through the Caribbean earlier in the week, causing estimated insured damage of up to $1.1bn.
A new, as yet unnamed storm, AL12, has formed as a tropical depression in the Atlantic Basin, according to hurricane information service Tropical Storm Risk, and is expected to reach category 2 strength by Saturday. It is not yet clear if AL12 will make landfall in the US as it is still a long way from land, but early indications show it is heading for Florida.
Another storm, tropical storm Jose, has blown past Bermuda on its way to Canada, but is expected to weaken to a tropical depression and peter out over the Atlantic.
While US storm activity has grabbed the bulk of the weekend headlines, Typhoon Nanmadol made landfall on Taiwan today as a category 1 storm after brushing the Philippines at category 4 and killing 16 people. A further storm system, tropical storm Talas, is forecast to strengthen and hit Japan as a category 1 typhoon on Friday.
According to risk modelling firm AIR Worldwide, Irene has flooded streets, downed trees and peeled off roof coverings from North Carolina to New York.
The hurricane has knocked out power to 3m people in the US so far, with more expected, and caused 2m people to be evacuated – 1.5m of them in the New York and New Jersey areas.
AIR contended the evacuations could have a “significant” impact on insurance losses from additional living expenses (ALE), particularly in the north-east where the cost of hotels and living expenses are higher. Although mandatory evacuation is not always covered in homeowners insurance policies, these losses are often paid for reasons of good will, the modelling firm said.
AIR added that business interruption losses could also be significant, pointing out that hundreds of flights have been cancelled across the region. The risk modeller said Atlantic City, New Jersey, had been closed down for two days and New York City hotels were “well below capacity”.
Since hitting New York, Irene has cut through Massachusetts and crossed the border into Canada.
Irene loss estimates to date in $m
- EQECAT: 200-400
- AIR Worldwide: 500-1,100
- EQECAT: 300-600