Event Summary from Twelve Capital
Hurricane Irma remains a catastrophic Category 5 storm despite slightly less strong wind speeds. Sea surface temperature and ocean heat content will be even higher on its projected track. Upper-level atmospheric conditions remain favourable. Irma is likely to remain a Category 4 or 5 hurricane until landfall. A strong ridge of high pressure is expected to steer Irma to the north-west once it reaches the Straits of Florida.
Most recent weather model guidance shows a relatively high agreement on the storm track. Irma is thus forecasted to travel across the Bahama Archipelago and thereafter to follow one of these scenarios:
1. Landfall in southern or south-western Florida
2. Bypass Florida, landfall in Georgia, the Carolinas or even further to the north
3. Landfall in western Florida or escape into the Gulf of Mexico
Scenarios 1 and 2 are by far the most probable according to the models. The exact landfall location remains however highly uncertain.
Irma brought great devastation to Antigua, Barbuda, Anguilla, Saint-Barthélémy, Saint-Martin (FR), Sint-Maarten (NL), the British Virgins Islands and the northern part of the U.S. Virgin Islands. All these Islands harbour some 300k+ inhabitants. More than ten fatalities have been reported so far. Puerto Rico (pop 3.4m) was spared from the strongest winds when Irma passed at some distance from its north shore.
Assessment of Loss Potential
Substantial and widespread damage has been reported from the islands in Irma’s path. It was a combination of excess wind speeds, storm surge and inland flooding that produced a picture of complete devastation in some places. Apart from damaged residential, commercial and industrial buildings, news pictures reveal also numerous destroyed cars, boats and airplanes. An estimation of insured losses can only be made after the full extent of damage has become evident.
Other Tropical Cyclone Activity
Hurricane Katia in the Gulf of Mexico is forecasted to make landfall as a Category 1 storm in Mexico’s province Veracruz on Friday or Saturday. Hurricane force wind and heavy rainfall can be expected. The impact on the insurance industry is likely to be very limited. Hurricane Jose in the Atlantic takes a similar path than Irma. It is already packing Category 1 wind speeds and could strengthen even further. Forecasts indicate a northward turn upon arrival at the Leeward Islands in the Lesser Antilles. It is unclear whether Jose will affect populated areas along its projected track.
Twelve Capital continues to monitor the situation closely and will inform upon major developments.
Please feel free to contact us in case of any questions.
Twelve Capital Team