Hurricane Laura has made landfall in the last hour as an extremely dangerous and large Category 4 hurricane with 150 mph sustained winds, near Cameron, Louisiana, around 30 miles SSW of Lake Charles.
Hurricane Laura intensified right up until landfall, almost making it to Cat 5 strength, as its central pressure continued to drop to 938 mb at landfall and with its hurricane force winds extending outwards up to 60 miles from the center, while tropical storm force winds extend up to 205 miles.
Hurricane Laura is a very large and dangerous storm, with its 150 mph winds and much higher gusts around the eye expected to do significant damage in the landfall region, but more widely its storm surge expected to inundate parts of Louisiana and Texas for miles, while hurricane speed wind gusts will down trees and damage buildings across a significant area.
Weakening is now expected and it will be long night for the local area, as with hurricane Laura making landfall just prior to 1am local time the hours of darkness bring a challenging time for those who did not or could not evacuate in advance of the storm.
Hurricane Laura’s landfall forecast still expects a storm surge of 15 to 20 foot in some areas (6 to 15 foot more widely), with water expected to deliver an “unsurvivable storm surge” according to the NHC, and water to be pushed inland as far as 40 miles that may not recede for some days.
This will create a challenging situation of damage and also difficulty in assessing the impacts as well, adding to the complications from hurricane Laura’s winds and rainfall.
CoreLogic said that the storm surge threatens as many as 1.1 million homes in its path, with over $265 billion in reconstruction cost value and is expected to heavily impact the Lake Charles and Jennings metro areas.
Rainfall totals are now expected to be 8 to 12 inches quite widely, with isolated maximum amounts of up to 18 inches possible.
Hurricane Laura, with 150 mph sustained winds, a significant surge and extreme levels of rainfall, brings a significant threat from both wind and water perils to the region it affects.
The landfall region is not as highly populated or built-up as other areas of the Gulf Coast and the ultimate insurance, reinsurance and insurance-linked securities (ILS) market loss will definitely be lower with hurricane Laura coming ashore where it did, rather than further west towards Galveston.
Last night we explained that catastrophe risk modeller RMS gave four analogue examples of Cat 3/4 hurricanes that came ashore in a similar location, each of which caused no more than $6 billion of insured losses at today’s exposure values.
We also explained last night that reinsurer Swiss Re estimates that 2005’s hurricane Rita caused a total insurance market loss that would be closer to $13.5 billion today, while a less similar but still impactful Gulf Coast hurricane, Ike in 2008, was nearer to a $23 billion industry loss event.
It’s hard to believe hurricane Laura won’t be higher than that and the insurance and reinsurance industry’s $10 billion to $20 billion range that was being widely discussed over the last two days does seem eminently possible.
For catastrophe bonds, it does seem like the majority will escape any loss, given they attach typically higher in reinsurance and retrocession programs. However it will take a little time for that to become clear.
Reinsurance programs are likely to attach and some of the largest insurers with exposure in the region have aggregate reinsurance towers that already have their deductibles eroded to a degree by sever storm activity, so those could be sources of losses that flow to ILS funds and collateralised reinsurance players.
But for now, all thoughts have to be with the people of Louisiana and the surrounding area, who face a challenging night as the ferocity of hurricane Laura passes through.
We’ll keep you updated as new information comes in and you can track the tropics over at our dedicated 2020 Atlantic hurricane season page.