Cat Risk Modelers Air Worldwide, KCC Release Laura Insured Loss Estimates

August 31, 2020

Estimates for insured property losses associated with Hurricane Laura by catastrophe risk modeling firms Air Worldwide and Karen Clark and Co. (KCC) are similar — both fall into the $8 billion range — but they are not exactly the same.

Boston-based AIR Worldwide has estimated that insured losses to onshore property resulting from Hurricane Laura’s winds and storm surge will range from $4 billion to $8 billion.

KCC reported that insured onshore property losses from wind and storm surge will likely amount to $8.7 billion in the U.S. and $200 million in the Caribbean. KCC said its estimate includes the privately insured wind and storm surge damage to residential, commercial, and industrial properties and automobiles. It does not include NFIP losses or losses to offshore assets.

Packing winds of up to 150 mph, Hurricane Laura made landfall near Cameron, Louisiana, around 1 am on Aug. 27. The storm had quickly intensified from a Cat 1 storm into a Cat 4 throughout the day on Aug. 26 as it progressed at a rapid pace northward through the Gulf of Mexico after having pummeled the Dominican Republic and Haiti, and to a lesser extent, Cuba.

AIR said despite its major hurricane status at landfall, the combination of Laura’s track through relatively lower populated areas and its Rmax on the smaller side likely worked to keep insured losses down somewhat.

The Associated Press has reported that18 deaths in Texas and Louisiana have been attributed to the storm; more than half of those people were killed by carbon monoxide poisoning from the unsafe operation of generators.

Nearly two dozen people in Haiti and the Dominican Republic were killed by the hurricane, according to various media reports.

Upon landfall in the U.S., Laura’s winds diminished. However, the storm’s 150 mph maximum sustained winds at landfall in the U.S. were the strongest in Louisiana since the 1856 Last Island Hurricane, according to KCC.

The storm surge was not as severe as had been predicted. According to Air Worldwide, highest storm surge was recorded around 15 feet in Cameron Parish, Louisiana. In advance of the storm, the National Hurricane Center had warned that the storm surge could rise to as high as 20 feet.

The coastal town of Cameron, in Cameron Parish, and the town of Lake Charles, Calcasieu Parish, 30 miles from the coast, bore the brunt of the storm, which cause widespread destruction to buildings of all types, AIR Worldwide reported.

“Residential buildings in and around Lake Charles saw significant damage to roofs of all geometries and with various roof cover types. Residential building envelopes were breached due to debris impacts and the damage was further exacerbated in many cases due to the impacts of storm surge. Residential homes in Louisiana are founded primarily on crawlspace and slab foundations, both of which are vulnerable when it comes to flood damage,” Dr. Cagdas Kafali, senior vice president of research, AIR Worldwide, said in a prepared statement.

Property information, analytics and data provider, CoreLogic, previously estimated residential and commercial insured losses from Hurricane Laura in Louisiana and Texas will come in at between $8 billion and $12 billion.

CoreLogic’s estimate includes losses from storm surge and wind, with losses from storm surge contributing less than $0.5 billion to that amount. The analysis includes losses impacting residential homes and commercial properties, including contents and business interruption, but does not include broader economic loss from the storm.

Sources: AIR Worldwide, KCC, CoreLogic

Topics Catastrophe Louisiana Profit Loss Hurricane Risk Management

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