AIR Worldwide Estimates that Industry Insured Losses Resulting from Hurricane Harvey's Winds and Storm Surge Will Range from USD 1.2 Billion to USD 2.3 Billion

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For Immediate Release: AIR Worldwide Estimates that Industry Insured Losses Resulting from Hurricane Harvey's Winds and Storm Surge Will Range from USD 1.2 Billion to USD 2.3 Billion AIR's initial estimates do not include the impact of catastrophic ...

For Immediate Release:

AIR Worldwide Estimates that Industry Insured Losses Resulting from Hurricane Harvey's Winds and Storm Surge Will Range from USD 1.2 Billion to USD 2.3 Billion

AIR's initial estimates do not include the impact of catastrophic flooding: total flood losses to be significant

BOSTON, Aug. 28, 2017 - Catastrophe modeling firm AIR Worldwide estimates that industry insured losses resulting from Hurricane Harvey's winds and storm surge in Texas will range from USD 1.2 billion to USD 2.3 billion. Note that these estimates do not include the impact of the ongoing torrential rain and catastrophic flooding from Hurricane Harvey's unprecedented precipitation. AIR Worldwide is a Verisk Analytics (Nasdaq:VRSK) business.

Hurricane Harvey's Category 4 wind speeds brought devastation to the city of Rockport, Texas (est. pop. 10,650), and surrounding towns when the storm made landfall at approximately 10:00 p.m. CDT on Friday, August 25. According to the National Hurricane Center (NHC), winds at landfall were approximately 130 mph, with hurricane-force winds extending 40 miles from the center and tropical storm-force winds extending 140 miles from the center. Storm surge was estimated at 6 to 12 feet. Harvey weakened to a Category 1 by 5:00 a.m. CDT Saturday morning and was downgraded to a tropical storm with sustained winds of 70 mph at 1:00 p.m. later that day.

"As devastating as the wind damage was in Rockport and surrounding towns, flooding from Harvey's torrential rains has had the greatest impact," said Dr. Eric Uhlhorn, principal scientist at AIR Worldwide. "With a lack of large-scale atmospheric steering, Harvey's motion was stalled resulting in extremely heavy and continuous tropical rainfall in a concentrated area. Harvey has already unleashed catastrophic and unprecedented flooding in southeastern Texas, and these conditions are expected to last for several more days. Louisiana is already experiencing heavy rainfall; the flood threat there will likely spread eastward once Harvey begins its northeastward path toward Houston." 

Feeder bands continued to bring abundant amounts of moisture from the Gulf of Mexico over land, with the Houston area being the primary target. Rainfall rates embedded in these storm bands ranged from 3-7 inches/hour from Saturday to Sunday in southeastern Texas. As of late Saturday night, three-hour rainfall totals of 12-15 inches were reported in and around  Galveston and Harris counties and the rain bands persisted over the next 12-18 hours, dumping an additional 10-20 inches. By Monday morning, 24.44 inches of rain had fallen at Bush International Airport in Houston, where a new daily rainfall record was broken with 16.07 inches falling in one day. Current rainfall totals range from 15-30 inches across the entire region.

Harvey is re-emerging into the Gulf where it is expected to continue moving southeastward at just 3 mph. Later today or overnight, the storm is forecast to turn northeastward, potentially making a second landfall near Houston later this week. While some strengthening is possible, forecasters at the NHC currently do not expect Harvey to achieve hurricane status as it lacks an organized core and is encountering strong southwesterly wind shear. An additional 10-20 inches of rain are expected between now and Friday, September 1.

In Rockport, TX, just 4 miles west of the landfall location, damage was severe; masonry walls collapsed, wood frame homes were shattered, roofs and metal siding were peeled off, mobile homes were overturned, and trees were uprooted.

According to NOAA's Storm Prediction Center, preliminary reports of 21 tornadoes were recorded in Texas from Friday night through Saturday, including one in Sienna Plantation early Saturday morning that ripped off roofs and caused severe tree damage.

In Corpus Christi (est. pop. 325,000), downed trees, debris, and power lines blocked roadways, signs were blown down, and some roofs were at least partially torn off. Incidents of direct structural damage, however, were limited.

Dr. Uhlhorn continued, "As a result of the unprecedented rainfall that has fallen in Houston and its surrounding areas, 66 of the 120 river gauging stations of the National Weather Service in Houston and Galveston are currently at various stages of flooding. By September 2, 74 of these gauging stations are expected to have flooded, about 50 of which will experience major flood stages. Many of the rivers in the area will crest with new record-setting flood levels. For example, the Buffalo Bayou, which flows through the downtown Houston area, is likely to crest at 73.0 feet, an astounding 11 feet higher than the previous historical record of 61.2 feet set in 1992. Similarly, Cypress Creek, which flows through neighborhoods north of downtown Houston, is likely to crest about 4 feet higher than the previous record of 94.3 feet set in 1949."

According to the Insurance Council of Texas, only about 20% of homeowners have flood insurance, almost all of which is through the National Flood Insurance Program (NFIP) run by FEMA. The NFIP is already nearly USD 25 billion in debt. Harvey may well push the NFIP up against its borrowing limit of USD 30 billion and prompt action by lawmakers to reform the program, which is due to be reauthorized at the end of September. In Harris County alone-home to Houston-the NFIP holds more than 240,000 policies, representing more than USD 60 billion in coverage.

As of 11:30 CDT on Sunday, it was reported by the Bureau of Safety and Environmental Enforcement (BSEE) that personnel had been evacuated from a total of 105 production platforms, representing 14.25% of the manned platforms in the Gulf. The BSEE estimates that approximately 21.64% of the current oil production in the Gulf has been shut-in and that 25.71% of natural gas production has been shut-in. There have been no reports, as yet, of significant structural damage to offshore assets as a result of Hurricane Harvey.

According to AIR, prior to 2003 Texas had no statewide standards for residential or commercial buildings. Cities chose what, if any, building code(s) to adopt for construction within city limits, and each city amended its code to meet local concerns. In 2003, the Texas Legislature mandated that all homes in the state, including those in the unincorporated areas, be built to International Residential Code (IRC) standards. This was the first statewide residential building code in Texas. In 2003, most cities of Texas adopted modern building codes to reflect improved wind load design provisions for the building envelope. Lastly, in 2004, the legislature mandated that all commercial structures started after January 1, 2006, meet the requirements of the International Building Code (IBC) statewide.

AIR's current estimates include wind and storm surge damage within the extent of Harvey's tropical storm-force and hurricane-force wind field. Included in the estimates are onshore residential, commercial, and industrial properties and their contents, automobiles, and time element coverage (additional living expenses for residential properties and business interruption for commercial properties; the estimates do not, however, include business interruption losses resulting from the closure of oil refineries in the region). Please note that total economic losses are expected to be higher than industry insurable loss estimates.

About AIR Worldwide
AIR Worldwide (AIR) provides risk modeling solutions that make individuals, businesses, and society more resilient to extreme events. In 1987, AIR Worldwide founded the catastrophe modeling industry and today models the risk from natural catastrophes, terrorism, pandemics, casualty catastrophes, and cyber attacks, globally. Insurance, reinsurance, financial, corporate, and government clients rely on AIR's advanced science, software, and consulting services for catastrophe risk management, insurance-linked securities, site-specific engineering analyses, and agricultural risk management. AIR Worldwide, a Verisk Analytics (Nasdaq:VRSK) business, is headquartered in Boston with additional offices in North America, Europe, and Asia. For more information, please visit www.air-worldwide.com.

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For more information, contact:
Kevin Long
AIR Worldwide
+1-617-267-6645
klong@air-worldwide.com





This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: AIR Worldwide via Globenewswire

Source(s) : AIR Worldwide

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