Hurricane Irene estimated to have caused $3 billion to $6 billion in U.S. losses; AIR Worldwide

Risk modelling firm AIR Worldwide have released an estimate for insured losses to U.S. onshore properties from hurricane Irene. They expect the final bill to be somewhere in the $3 billion to $6 billion range for re/insurers. This estimate includes wind and storm surge damage to onshore residential, commercial and industrial properties and their contents, automobiles, and time element coverage (such as business interruption).

AIR Worldwide raise an interesting disconnect between the National Hurricane Centres windspeed reporting when hurricane Irene made landfall in North Carolina and the actual windspeeds recorded on the ground. While the NHC was reporting windspeeds of 85mph when Irene made landfall, weather stations on the ground were recording speeds of just 50mph to 60mph, a significant difference that will reduce the losses from what might have been imagined to be reasonable.

They say this difference could be due to winds in the atmosphere being transferred inefficiently to the ground. Some uncertainty remains in their estimate due to the lack of clarity around actual surface wind speeds. Of course the windspeed in the atmosphere is not what matters when it comes to damage levels, it is the actual windspeed at ground level that matters.