With the 2018 Atlantic hurricane season underway, the (re)insurance industry is still reflecting on the events of last year. The 2017 season will be remembered as one of the most active, damaging, and costliest seasons on record, and specifically for the impacts of three storms: Harvey, Irma, and Maria.
RMS followed its longstanding strategy of delivering thoughtful and thorough analysis of all available data sources when responding to the events of 2017, including the use of instrumentation and in-person RMS staff research and reconnaissance.
As is usual in the weeks following a hurricane’s impact on land, much of the focus surrounding Hurricane Maria has now shifted away from estimating losses with models to surveying the actual damage and claims incurred. With the collection of claims and losses, evaluating the array of loss estimates published by catastrophe model vendors in Maria’s immediate aftermath will begin. Included in this array is the RMS best estimate of insured loss, a range between US$15 billion and US$30 billion.
Jeff Waters, product manager – Model Product Management, RMS
Mark Hoekzema, chief meteorologist, Earth Networks
As we have already seen during the 2017 North Atlantic hurricane season, tropical cyclones such as Harvey, Irma, and Maria cause an array of impacts to homes, businesses, and people, each with varying drivers of damage and recovery timelines. The resulting effects from these and other events reinforce the importance and value of preparedness and responsiveness when managing hurricane risk.
Having an accurate view of the extent and severity of hurricane hazard is imperative in informing effective event response strategies — both throughout a real-time event, and for efficient claims management processes afterwards. It can help insurers anticipate claims locations, counts and overall impacts to their book, where power outages and business interruption are likely to occur, where to deploy claims adjusters of various experience levels, and identify where fraudulent claims are likely (or unlikely) to occur.
Although tragic for everyone involved, some good can come from a devastating disaster as it does provide a unique opportunity to transform the building stock, and to “build back better”. Typically, many structures will have been demolished, or need to be removed. There will also be funding, whether it is via insurance payments, assistance grants and even international aid, to help support improvements. From an island in the Caribbean to a city in central Mexico, we could now institute these profound upgrades, so that for any repeat earthquake or hurricane, the damage and losses will be much reduced. Ironically, a disaster creates the best of all times to make improvements.
Michael Young, Head of Americas Climate Model Product Management, RMS
The story of Hurricane Maria, the thirteenth named storm of the 2017 North Atlantic hurricane season, really started with landfall over Dominica on Tuesday, September 19 — as a category 5 hurricane. It was then Puerto Rico’s turn. As Maria approached, the system did weaken slightly during an eyewall replacement cycle, and made landfall on Wednesday, September 20, near Yabucoa, as a category 4 hurricane. It was the most intense landfalling hurricane for the island since the 1928 San Felipe Segundo Hurricane, with RMS HWind reporting maximum sustained winds of 130 miles per hour (209 kilometers per hour).
Rajkiran Vojjala, vice president – Model Development, RMS
Last week, Hurricane Maria churned across Puerto Rico with the strongest winds to hit the island in over 80 years. Puerto Rico is home to more than 50 percent of the world’s leading pharmaceutical and life science companies, which operate around 80 U.S. Food and Drug Administration (FDA) approved manufacturing plants on the island. Therefore, the impact of Maria on the industrial line of business not only influences the overall losses experienced in the event, but critically has many ramifications for Puerto Rico’s long-term economic recovery.
Michael Kozar, senior modeler – Model Development, RMS
The latest track probability analysis of the current model forecasts for Hurricane Maria has been released by the RMS HWind team, based on forecast models initialized at 12:00 UTC Sunday, September 24. This proprietary track forecast probability product from RMS HWind provides unique insight into the likelihood of where a storm might go, to help deliver insights beyond what is available from public sources.
The midway point of the Atlantic hurricane season has just passed, and despite a relatively tame start, we have already witnessed two major U.S. hurricane landfalls — Harvey and Irma — in quick succession. It is the first calendar year on record where two hurricanes of Category 4 strength or greater have made landfall in the contiguous U.S. To add insult to injury, Maria has quickly intensified and is expected to be the fourth major hurricane of the season as it tracks through the Leeward Islands, an area left devastated by Irma less than two weeks ago.
With 13 named storms, seven hurricanes, and three major hurricanes, we have already met the National Oceanic and Atmospheric Administration (NOAA) definition of an above-average full Atlantic hurricane season. It is understandable that many in the insurance industry may be suffering from “hurricane fatigue” well before the calendar flips over to October.