RMS Estimates Hurricane Dorian Insured Losses From Wind And Storm Surge In The Caribbean Will Be Between USD $3.5 and $6.5 Billion
NEWARK, Calif. -
September 09, 2019 -
RMS, a leading global risk modeling and analytics firm, has estimated that insured losses to the Caribbean from Hurricane Dorian will be between $3.5 and $6.5 billion. This estimate represents insured losses associated with wind and storm surge damage across the Caribbean region, most notably in the Bahamas, which was the most severely impacted country.
RMS estimates that nearly all of the Caribbean insured losses will come from the Bahamas, particularly Grand Bahama and Abaco Islands. This loss estimate reflects property damage and business interruption caused by wind and storm surge-driven coastal flooding to residential, commercial, industrial, marine and automobile lines of business, plus factors for both post-event loss amplification (PLA) and non-modeled losses.
Jeff Waters, Senior Product Manager, RMS North Atlantic Hurricane Models said, “There is a high degree of uncertainty on the potential impact of post-event loss amplification from this event. Nevertheless, we expect PLA in the Bahamas to be significant due to constrained access to the islands and infrastructure damage. Port closures, damaged roads, and severe damage to the airport will make it difficult to deliver the necessary labor and materials to impacted areas. It will also limit the ability of residents and business owners to return to damaged homes and buildings. Consequently, cost of materials is expected to inflate, and repairs could be prolonged, both of which are expected to amplify the cost of the claims from this event.”
Business interruption losses are expected to be significant in the Bahamas as a result of the storm, as hotels and resorts comprise a large portion of the overall commercial exposure in the two most heavily impacted islands - Grand Bahama and Abaco.
Peter Dailey, Vice President, Model Development at RMS said, “Insured losses in the Bahamas are also expected to settle over a longer period than in a typical Caribbean hurricane given an expected spike in demand for claims adjusters, many of whom will be unable to inspect properties or even access the two main affected islands for some time.”
Hurricane Dorian was the fourth named storm of the 2019 North Atlantic hurricane season, and the first major hurricane of the season. Dorian made landfall on Sunday, September 1, 2019 at Elbow Cay on the Abaco Islands in the Bahamas as a Category 5 hurricane, making it the strongest storm to make landfall in the Bahamas on record. It later reached peak intensity with maximum sustained winds estimated by RMS HWind to be 185 mph (297 km/hr), before becoming nearly stationary for more than 36 hours, causing catastrophic damage to the northern Bahamas, notably to Grand Bahamas and Abaco Islands.
For this loss estimate, wind and storm surge impacts were simulated using version 18.1 RMS North Atlantic Hurricane Models and RMS ensemble footprints, which are hazard reconstructions of Dorian’s wind and storm surge fields.
The technology and data used in providing this Information is based on the scientific data, mathematical and empirical models, and encoded experience of scientists and specialists. As with any model of physical systems, particularly those with low frequencies of occurrence and potentially high severity outcomes, the actual losses from catastrophic events may differ from the results of simulation analyses. RMS SPECIFICALLY DISCLAIMS ANY AND ALL RESPONSIBILITIES, OBLIGATIONS AND LIABILITY WITH RESPECT TO ANY DECISIONS OR ADVICE MADE OR GIVEN AS A RESULT OF THE INFORMATION OR USE THEREOF, INCLUDING ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL RMS (OR ITS PARENT, SUBSIDIARY, OR OTHER AFFILIATED COMPANIES) BE LIABLE FOR DIRECT, INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY DECISIONS OR ADVICE MADE OR GIVEN AS A RESULT OF THE CONTENTS OF THIS INFORMATION OR USE THEREOF.
RMS models and solutions help insurers, financial markets, corporations, and public agencies evaluate and manage global risk throughout the world. RMS has over 1,200 employees across 13 offices in the US, London, Bermuda, Zurich, India, China, Japan, Singapore, and Australia, with products and models covering six continents.
We lead an industry that we helped to pioneer—catastrophe risk modeling – and continue to innovate. In May 2019, we announced the launch of Risk Intelligence™ (RI), an open, flexible and future-proof platform for strategic risk management. Through this purpose-built platform, clients can tap into RMS HD models, rich data layers, intuitive applications and APIs that simply integrate into existing enterprise systems to support business decisions across underwriting, risk selection, mitigation and portfolio management.
Insurers, reinsurers, trading companies, and other financial institutions trust RMS solutions to better understand and manage the risks of natural and human-made catastrophes, including hurricanes, earthquakes, floods, terrorism, and pandemics.
This Content is Locked
For security reasons, this proprietary content is locked. To access this, and other RMS content, please continue to RMS Owl. If you are already a member, simply sign in for exclusive access. If you are an RMS client but not an RMS Owl member, sign up via the Need to Register option on the RMS Owl home page to unlock this important resource.