Hurricane Ike Threatens South Florida

RMS Revises Loss Estimate for Hurricane Gustav to $2.5bn - $4.5bn

Hurricane Ike has weakened slightly to a category 3 hurricane but is still expected to re-intensify in the next few days when the wind shear currently affecting the hurricane reduces. Forecasts indicate that Ike could pass across the Bahamas or Cuba on Sunday and Monday before a possible landfall in southern Florida on Wednesday.

"There is still a high degree of uncertainty around Ike's track, and with each forecast it seems to be moving further south. There is a chance that Ike will pass through the Florida Straits, or strike Cuba, but homeowners in Florida should certainly be on guard," said Dr. Christine Ziehmann, director of model management at Risk Management Solutions.

There is also uncertainty around Ike's intensity, although it is expected to remain a major hurricane (or very near to) throughout the five-day forecast period.

Hurricane Gustav

RMS has revised its initial industry loss estimate for Hurricane Gustav, now ranging from $2.5 billion to $4.5 billon. This new estimate is based on analyses of the wind field and damage associated with Gustav for onshore and offshore exposure as well as the impact of storm surge.

"The key factor driving the initial estimate down was the fact the storm started decaying very rapidly just before landfall - much more than the forecasts indicated - and continued to weaken over land," commented Dr. Ziehmann.

RMS reconnaissance teams that were deployed to the region affected by Hurricane Gustav have surveyed and documented the damage caused by the storm. Wind damage inland is relatively limited and people who learned from Katrina by replacing their roof or elevating their home on stilts suffered less loss than those who did not.

Reports indicate that no major damage was caused by Gustav to the oil infrastructure in the Gulf of Mexico, although it is likely to be some time before the Gulf of Mexico will be back to pre-storm production levels. Reports indicate that the majority of the problem stems from the Louisiana power transmission infrastructure, which sustained significant damage. It could take up to 4 weeks for power to be restored fully in some of the parishes.

Source: Risk Management Solutions

Posted: Friday, September 05, 2008 12:00:00 AM. Modified: Friday, September 05, 2008 4:23:12 PM.

(317) 875-5250 - Indianapolis | (202) 628-1558 - Washington, D.C.

Contact NAMIC | Press | Advertise | Sponsor

We are 1,400 property/casualty insurance companies serving more than 135 million auto, home and business policyholders, with more than $196 billion in premiums accounting for 50 percent of the automobile/homeowners market and 31 percent of the business insurance market. We are the largest and most diverse property/casualty trade association in the country, with regional and local mutual insurance companies on main streets across America joining many of the country’s largest national insurers who also call NAMIC their home. More than 200,000 people are employed by NAMIC members.