AIR Estimates Yasi Insured Losses between $356 Million and $1.5 Billion

Catastrophe modeling firm AIR Worldwide has issued early estimates indicating that insured losses to properties and business income from the Category 5 (Australia Bureau of Meteorology intensity scale) cyclone Yasi that struck Australia at midnight local time, Wednesday, February 2, will be between A$350 million (US$356.66) and A$1.5 billion (US$1.53 billion).

“In the aftermath of the most powerful cyclone to strike Australia’s east coast since 1918, many residents are expressing relief; while the storm was indeed damaging, its impact on heavily populated areas along the country’s northeast coast was less than expected,” noted Dr. Vineet Jain, principal engineer, AIR Worldwide.

AIR’s initial analysis concludes that “throughout Queensland and affected areas, newer commercial buildings sustained only minor structural damage, illustrating the effectiveness of Australia’s building code even in the face of such a major storm.

“Non-engineered residential structures performed less well, with some sustaining major structural damage, mostly to roofs. The towns of Tully and Cardwell were particularly hard hit, with many buildings sustaining significant structural damage, particularly caravans which are quite vulnerable to high wind-speeds. Meanwhile, flooding is a major concern in Townsville, Ingham and Giru. Cairns, with a population of over 160,000, was spared major damage, though more than 65 per cent of homes there are without power.”

Dr. Jain explained: “Losses from Yasi may well exceed those from Cyclone Larry in 2006. Larry, which followed a similar path to Yasi, though it tracked slightly to the north and had less intense winds—caused insured losses of about A$ 540 million (in 2006 AUD) [US$550 million], according to the Insurance Council of Australia, which lies within the estimated range posted by AIR in real time in 2006.”

AIR explained that its insured loss estimates reflect “insured physical damage to onshore property (residential, commercial/ industrial), both structures and their contents,” as well as business interruption losses.

But they do not reflect losses due to the following causes:
• Loss to offshore properties, pleasure boats and marine crafts, and automobile
• Losses to uninsured properties
• Storm surge losses and inland flooding
• Demand surge—the increase in costs of materials, services, and labor due to increased demand following a catastrophic event Losses to infrastructure
• Losses from other non-modeled losses, including loss adjustment expenses and landslide
• Losses from crop/plantations are not included.

Strong winds caused most of the damage. Dr. Jain noted that “precipitation was generally less than 150 mm [app 6 inches] along the coastal areas, with as much as 369 mm [app.141/2 inches] of rain recorded in Woolshed, a town at 556 meters [app 1765 feet] elevation in the Great Dividing Range.

“Storm surge as high as 5 meters [over 15 feet] was reported in Cardwell with 3 meters of storm surge reported in Clump Point and 2.3 meters [app 7 feet] of storm surge reported in Townsville. Because the cyclone struck 500-1000 km [310 to 625 miles] north of the region worst-hit by flooding last month, as well as the storm’s relatively fast forward speed, Yasi’s inland flooding effect is expected to be minimal. Still, there is a continued risk of localized flash flooding well inland today, as a much weakened Yasi continues to push to the west-southwest.”

Yasi also caused damage to Queensland’s agriculture; early predictions suggest that 75 percent of the nation’s banana supply and half the region’s sugarcane have been obliterated by Yasi’s winds.

Source: AIR-Worldwide

Topics USA Profit Loss Flood Australia