Early Insured Loss Estimates on Hurricane Gonzalo Up to $400M

October 23, 2014

Early estimates by catastrophe modeling firms indicate insured losses from Hurricane Gonzalo in Bermuda will come in between $200 and $400 million.

EQECAT estimates $300 million in insured losses, about the scale caused by Hurricane Fabian in 2003. Both storms were similar, it noted in an Oct. 20 bulletin. Winds from Gonzalo reached 110 miles per hour, while Fabian generated peak winds of 114 mph. The estimate considers increase in values and limits in the 11 years between the two events, EQECAT said.

AIR Worldwide, meanwhile, estimated on Oct. 22 that insured losses caused by Hurricane Gonzalo will range between $200 million and $400 million. That’s based on a tropical cyclone model AIR Worldwide uses for the Caribbean. AIR Worldwide insured loss estimates include physical damage to onshore property and loss to content/industrial facilities and business interruption. They do not include losses to infrastructure, boats or losses from hazardous waste cleanup or vandalism.

Similarly, AIR Worldwide compared the storm to 2003’s Hurricane Fabian, which tracked just west of Bermuda and had slightly higher winds but similar damage costs.

AIR Worldwide estimated that the center of Gonzalo hit the south-central coast of Bermuda and that the storm itself stretched out in a large 30-mile radius. But AIR Worldwide said that the storm weakened from a Category 3 hurricane before landfall because of lower sea surface temperatures and higher wind shear near Bermuda.

EQECAT and AIR Worldwide both pointed out that the storm went on to produce tropical storm conditions and heavy rains in Newfoundland in Canada, and then northern Scotland and parts of Europe.

Sources: EQECAT and AIR Worldwide

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