The fact hurricane Henri weakened over cooler waters as it approached the US northeast states and made landfall as a tropical storm has likely saved the reinsurance and ILS industry from more significant losses, with Henri’s industry loss likely to fall below one billion dollars.
Broking group BMS’ Senior Meteorologist Andrew Siffert explained in an update that the cooler waters south of New England were not sufficient for hurricane Henri to maintain its strength, resulting in a weakening of the storm and reducing the loss potential that came with it.
In addition to the weaker landfall, Henri also tracked slightly further east than earlier anticipated, which reduced the wind impacts experienced by Long Island and Connecticut.
Leaving the flooding rains as the main impact from weaker tropical storm Henri, with a serious flooding situation for some areas of the Tri State region.
But even this could have been worse, as Siffert explained that a trough of low pressure that was responsible for driving Henri northwards also helped by draining the storm of tropical moisture to a degree as it travelled.
Leading Siffert to explain that it was no surprise that Henri eventually made landfall as a weaker storm and that the financial impacts were lower than models had suggested as it approached.
“This will still be a multi-million dollar insurance industry loss event, but the billion-dollar loss event is now off the table,” Siffert explained.
Adding that, as a result, “This does not look to be a big reinsurance event for carriers.”
This aligns with the post-landfall assessment from insurance-linked securities (ILS) and reinsurance investment manager Twelve Capital from yesterday, who said it does not expect Henri will impact any ILS positions in its funds.