Irma loss comparable to Katrina/Sandy
The scale and complexity of the flood loss stemming from Hurricane Irma has the potential to be comparable to that from Hurricane Katrina and Superstorm Sandy.
This is according to Robert Muir-Wood, RMS chief research officer, and Matthew Eagle, head of international analytics at Guy Carpenter, who shared their latest perspectives on hurricanes Irma and Harvey—as well as how growth in computer processing is moving flood modelling into the high definition (HD) era—at a briefing on Monday September 11 at the Monte Carlo Rendez-Vous.
“In the future, we will consider Irma a significant flood event. It may well be comparable to events such as Katrina or Sandy where the majority of the loss was caused by flood. We are not saying that yet, but that is the potential,” said Muir-Wood.
At the time of the press conference, Irma had moved along the peninsula of Florida and had weakened, becoming a tropical storm. It was continuing to run out of energy, as Muir-Wood pointed out. Heading out of Florida, it would increasingly become a rainfall event as it went further north.
Muir-Wood said that the latest technology allows insurers to track such events almost in real time. “If you are an RMS client, you’ve got all these products that can update you time-step by time-step as this storm has expanded and travelled further north up the Florida peninsula.”
Looking at the modelling of the storm’s path over Florida, RMS indicated a 10 percent chance of insured wind losses exceeding $60 billion.
Muir-Wood suggested a significant part of the economic loss will come from flood, and most of that is going to be storm surge-driven.
He said that models are improving all the time and that the next generation of flood models will be higher definition.
“HD means we are sampling the loss at an individual property level in order to comprehend the totality of the impact at multiple locations in a portfolio,” he explained.
The HD flood models take many factors into consideration, such as the elevation of a property.
“A small elevation in the property can make a huge difference in the risk cost,” said Muir-Wood. RMS is releasing its US inland flood HD model in early 2018.
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