Hurricane Hanna, the first hurricane of the season, makes landfall in Texas

Hurricane Hanna, the first hurricane of the 2020 Atlantic tropical storm season, saw its sustained winds reaching 90mph before making landfall on the Texas coastline late yesterday. Post-landfall update towards the foot of this article.

Hanna was a tropical storm on Friday and while it was expected to strengthen it was only given a low probability of reaching hurricane status.

But hurricane Hanna defied some of the forecast models, to become the first hurricane of the 2020 Atlantic season on Saturday and intensify further as it moved towards the Texas coastline.

Insurance, reinsurance and ILS market interests may have had a closer eye on tropical storm Gonzalo as yesterday forecasts suggested it could make it through the Caribbean, but now that storm is dissipating and hurricane Hanna has become the one to watch.

Hurricane Hanna achieved sustained winds of 90mph with higher gusts to 110mph or more, as it moved slowly towards a landfall in Texas somewhere on the central Padre Island seashore.

Hurricane Hanna could have strengthened further and the storms intensity was only limited by the amount of time it had over the warm Gulf waters.

The modelled intensity forecast from TropicalTidbits.com showed a continued spike in wind speeds was expected up until landfall.

The Texas coastal islands are already experiencing storm surge from hurricane Hanna, while the forecast is for coastal inundation totals of 2 to 6 feet above normal sea levels widely around the landfall region.

Corelogic said in an update on hurricane Hanna that more than 14,000 residential properties lie in surge exposed areas near the area of the storms expected landfall.

Significant rainfall totals are expected with hurricane Hanna, with the potential for isolated totals of 18 inches or perhaps more and life-threatening flash flood warnings raised for the southern Texas coastal region.

Adding to the challenges, hurricane Hanna is coming ashore in a region of Texas where Covid-19 cases have been spiking in recent weeks, raising issues around distancing at evacuation centers should they be needed.

Insurance, reinsurance and insurance-linked securities (ILS) interests may not face all that significant wind damage losses from this first hurricane of the season, Hanna has a relatively small eye with hurricane-force winds only extending outward up to 25 miles from the center.

But, should rainfall totals reach the 18 inch forecast there is the potential for a water driven insured loss, although much of that would fall to the NFIP rather than the private market.

Update, Sunday 26th July, 10:00 BST:

Hurricane Hanna made landfall on Padre Island with 90mph sustained winds and higher gusts at around 17:00 CDT on Saturday 25th July.

Hurricane Hanna’s eyewall then meandered along the coast, eventually making a second landfall in eastern Kenedy County, Texas, about 15 miles (25 km) north-northwest of Port Mansfield, Texas, still packing maximum sustained winds of 90 mph.

Gradual weakening then began as the eye of hurricane Hanna moved inland and at this time (10:00 BST, 04:00 CDT), now tropical storm Hanna is moving into northern Mexico taking heavy rains with it and with rapid weakening now expected.

The Governor of Texas declared a disaster for 32 counties of the state and the region from Corpus Christi to Brownsville has been particularly affected by Hanna’s hurricane force winds.

Property damage has been reported from Hanna’s storm surge and winds, while marine assets are reported damaged in Corpus Christi harbour.

Flooding, from the storm surge pushed onshore by hurricane Hanna and the ensuing up to 18 inches of rainfall that has been forecast with the storm, is still expected to be the major driver of damages though.

BMS Group Vice President & Senior Meteorologist Andrew Siffert reported yesterday as hurricane Hanna approached tat given the more rural region of Texas coastline where the storm made landfall, the impacts to the insurance and reinsurance industry would not be particularly high.

In fact, Siffert highlighted that location could be everything where Hanna is concerned and the eventual insurance industry loss from the hurricane.

Siffert explained that 2008’s Hurricane Dolly made landfall in the more populated area of South Padre Island near Port Mansfield as a category 1 storm and caused an estimated $600 million insurance industry loss.

However, hurricane Hanna was expected to make landfall in a more rural area of Texas, in a similar location to category 3 Hurricane Bret in 1999. In 2019 dollars Bret would only have caused an insurance industry loss of around $50 million, Siffert said.

So, with hurricane Hanna the industry may be looking at an industry loss in the low hundred millions of dollars, but with a relatively significant proportion likely to be dealt with under FEMA’s National Flood Insurance Program, rather than in the private market.