Update: Irene made landfall around 7.30am ET about 60 miles south west of Cape Hatteras with maximum sustained winds of 85mph.The centre of Irene will move across eastern North Carolina today and over southern New England tomorrow, Sunday. Irene is forecast to remain a hurricane as it moves near or over the mid-Atlantic states and New England.
Original article: Hurricane Irene is soon to make her first landfall on the U.S. coastline near Cape Hatteras in North Carolina. Irene will be the first significant hurricane to make landfall for a while on the U.S. making it a major news event. Mandatory evacuations have been put in place for much of the U.S. northeast coast including parts of New York.
Hurricane Irene has weakened on her approach to land. Currently Irene is a Category 1 hurricane with maximum sustained winds of 90mph. Hurricane force winds extend outwards up to 90 miles from the centre of the storm. Despite the weakening of Irene she is still a major storm and should not be taken lightly. Her storm surge is expected to be extensive and rainfall levels will be extremely high, so flooding is a real risk on top of wind damage.
Catastrophe bond trading has not been as brisk as some would have expected on Irene’s approach, trading is certainly happening on the potentially impacted cat bonds but we’ve seen no real sign of panic in the market. There is still much uncertainty of the damage levels Irene will cause and we believe some investors had assumed a general weakening of the storm. We’ll have to wait until after landfall and Irene’s passage along the northeast coastline near New York and other major population centres to have any idea of the impact to cat bonds.
Bill Dubinsky, Managing Director, Willis Capital Markets & Advisory said; “Approximately, 70% of catastrophe bonds have exposure to US hurricane risk. Of these, some bonds offer elevated exposure to either North Carolina risk or Northeast risk. Investors are analyzing their portfolios vs. the potential threat and adjusting their positions in some cases. We see investors trading in and out of bonds as well as using the parallel Live Cat market to rebalance their positions.”
In the Caribbean hurricane Irene is estimated to have caused between $500m and $1.1 billion in damages. We’ll update you with damage estimates from the U.S. after the storm has passed. We hope all our readers and visitors stay safe from this dangerous storm! Keep up to date on our 2011 Atlantic Hurricane Season page.
Irene’s latest position and forecast path:
How Irene looks from above as she approaches the U.S. coastline: