Hurricane Sally intensifies to Cat 2, 105mph winds on approach to landfall

Hurricane Sally made a last attempt to strengthen as it wobbled slowly towards the north Gulf Coast and has now intensified into a Category 2 storm, with sustained winds reaching 105 mph and higher gusts being reported.

It changes the outlook a little for the insurance, reinsurance and insurance-linked securities (ILS) sector, from the lower strength Cat 1 landfall that was expected as of yesterday evening into something perhaps more loss-threatening if the wind-increase is sustained to landfall over the next few hours.

The outlook for hurricane Sally to bring “historic flooding” to the region remains, with storm rainfall totals of as much as 30 inches still anticipated as hurricane Sally slowly moves ashore in the Alabama (Mississippi, Florida) coastal region.

In fact, reports from the coastal region state that rainfall totals of over 16 inches have already been recorded in the Pensacola area and these rains are set to continue throughout today.

The NHC warns of “historic life-threatening flooding” and this really can’t be understated. Hurricane Sally will cause severe inland flooding wherever these rainfall totals occur over the next day or so.

In its latest update, the NHC said that hurricane Sally’s maximum sustained winds have reached 105 mph, making the storm a strong Category 2. Dropsonde recordings in the eyewall of hurricane Sally suggest gusts of up to 130 mph being seen at or near ground-level.

Hurricane Sally current position and forecast path:

The NHC warns that further strengthening is possible for hurricane Sally and a low Cat 3 landfall cannot be ruled out, although fluctuations are likely and as land interaction increases weakening expected, so it may be short-lived.

Minimum central pressure is now down to 968 mb.

You can see a modelled intensity forecast for hurricane Sally below (from TropicalTidbits.com):

Storm surge total forecasts remain more subdued at 3 foot to 7 foot across a wide area of coastline around the Mississippi, Alabama, Florida coastline. However, this last minute intensification could mean higher totals are seen than the latest update from the NHC shows at this time.

A peak storm surge forecast map for hurricane Sally from NOAA can be seen below:

The increased wind speeds just prior to landfall do suggest that the threat of property damage from winds has risen since late yesterday. As a result the potential for insurance and reinsurance market impact has likely risen as well.

This late intensification has become a feature of certain hurricanes in the last few years, particularly with the warm Gulf waters fuel strengthening right up to landfall. It’s also something that was warned about in forecasts again this year.

Our sources in the market suggest modelled estimates for the potential insurance market impact from hurricane Sally stand in the low single-digit billions of dollars. However, these were run overnight and the intensification in the last hour could have elevated those expectations somewhat, making the chances of certain reinsurance covers coming into play more likely.

That said, hurricane Sally will be a massive rainfall and flooding event, it seems, with the wind and surge impacts likely a smaller contributor to the overall impacts and economic losses. In turn meaning more of the ultimate loss goes to the NFIP and a little less to the private insurance and reinsurance market.

But as another potential multi-billion dollar industry loss, hurricane Sally will help to ramp up the pressure for higher reinsurance renewal rates even further and also add to the leaking of some claims to certain ILS structures and strategies, as well as accelerate further the aggregate deductible erosion being widely seen from recent months of severe weather and catastrophe loss impacts in the United States.

Details from the NHC’s latest update can be seen below:

Sally is moving toward the north-northeast near 2 mph (4 km/h). A north-northeastward to northeastward motion at a slightly faster forward speed is expected later today and tonight, followed by a faster northeastward motion on Thursday. On the forecast track, the center of Sally will approach the northern Gulf Coast this morning, and make landfall in the hurricane warning area later today. Sally is then expected to move inland across southeastern Alabama
tonight.

Recent data from An Air Force Reserve reconnaissance aircraft and the Mobile Alabama Doppler weather radar indicate that Maximum sustained winds have increased to near 105 mph (165 km/h) with higher gusts. Some further strengthening is possible before Sally makes landfall. Rapid weakening is expected after landfall occurs.

Hurricane-force winds extend outward up to 40 miles (65 km) from the center and tropical-storm-force winds extend outward up to 125 miles (205 km). A sustained wind of 81 mph (130 km/h) with a gust to 110 mph (178 km/h) was recently reported in Sally’s northern eyewall by NOAA buoy 42012, located about 50 miles southeast of Mobile, Alabama. A sustained wind of 72 mph (117 km/h) and a gust to 90 mph (144 km/h) were recently measured by the NOAA C-MAN observing station on Dauphin Island, Alabama.

The minimum central pressure recently reported by the Hurricane Hunters was 968 mb (28.58 inches).

You can track the tropics over at our dedicated 2020 Atlantic hurricane season page.