Harvey, still a tropical storm although not for much longer, is now forecast to become hurricane Harvey in the coming hours and to reach Category 3 major hurricane strength by the time it makes landfall on the middle Texas coast of the Gulf of Mexico.
Tropical storm Harvey is undergoing a period of explosive intensification, having jumped from a very benign tropical storm to one now packing sustained winds of 65 mph and above at the most recent NOAA update. That’s put the storm firmly on the agenda for reinsurance and ILS interests this afternoon.
NOAA’s National Hurricane Center now says that Harvey is expected to be a major hurricane by the time the storm makes landfall in Texas, with some meteorologists now suggesting Category 3 or even 4 is possible, as the intensification is expected to continue.
You can see from the latest models that wind speed forecasts are on the rise as Harvey intensifies towards first minor hurricane status, but then the intensification is forecast to continue and major hurricane status is considered a distinct possibility.
However, it’s important to note that while wind speeds are now forecast to get towards levels where they could pose a threat to both property and lives, the flooding risk from hurricane Harvey remains exceptional and rainfall levels will be extreme.
Add to that a growing storm surge risk, as Harvey intensifies and increases in size, and the chances of life threatening flooding along the coast and inland, where Harvey is forecast to meander dropping significant amounts of rainfall, are increasing.
Landfall is slated for somewhere between Corpus Christi and Galveston, with Houston also firmly within the hurricane Harvey cone of uncertainty. It’s an area packed with insurable interests and so reinsurance firms, ILS funds and even catastrophe bond investors should be watching Harvey as it intensifies.
Just how much it intensifies will have a significant bearing on the potential for reinsurance and ILS sector losses, as wind damage is likely to cause more losses to leak into ILS markets than rainfall and resulting flood.
The NHC says that “life threatening storm surge and freshwater flooding are possible,” with rainfall totals set to reach 12 to 20 inches with isolated maximum amounts of 30 inches or more possible.
Storm surges are currently forecast at up to 10 foot, but that will likely increase as Harvey intensifies into a hurricane a strengthens further.
Aon Benfield’s Impact Forecasting unit had the following to say:
With Harvey now strengthening at a faster rate than indicated in previous advisories, the NHC intensity forecast has become quite concerning. Water vapor images indicate that the cyclone’s outflow is expanding, which suggests a low wind shear environment, and Harvey will be moving over a warm eddy of high oceanic heat content in the western Gulf of Mexico in about 24 hours. As a result of these conditions, several intensity models are now explicit in showing Harvey reaching major hurricane intensity. Even more concerning is that the SHIPS Rapid Intensification indices are incredibly high. As an example, the guidance is indicating a 70 percent chance of Harvey’s winds increasing by 50 mph (85 kph) in the next 36 hours. Based on this guidance, the NHC official intensity forecast now calls for Harvey to reach major hurricane strength by 36 hours, before it reaches the middle Texas coast.
Track Harvey as the storm makes its way towards the Texas coastline over at our dedicated 2017 Atlantic hurricane season page.
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