Impacts and in particular wind damage from hurricane Zeta have spread far inland across the United States, bringing back memories of Isaias earlier this year.
Impact Forecasting, the catastrophe risk analytics and meteorology unit of insurance and reinsurance broker Aon, said that insured losses from the storm that made landfall late Wednesday in Louisiana would “well surpass $1 billion” and the fact damage has been seen as far north as North Carolina suggests that will easily be the case.
As we explained yesterday, hurricane Zeta’s landfall impacts are expected to be another attritional insurance and reinsurance market loss event, likely into the low single-digit billion dollars range.
As the 11th named tropical storm impact and sixth hurricane to impact the United States this year, the aggregation of these losses has eaten into aggregate reinsurance deductibles and even some catastrophe bonds.
Further aggregate deductible erosion for certain cat bonds is possible with hurricane Zeta losses, ILS fund manager Plenum explained yesterday.
But the rate at which hurricane Zeta travelled onshore and inland could exacerbate the industry loss and brings back memories of hurricane Isaias from August this year, which caused property damage as far north as into New York state.
With hurricane Zeta, the swathe of wind damage may not reach quite that far, but reports have been seen of trees downed and damage experienced as far up the country as North Carolina.
That promises to make the claims assessment process a more lengthy one with hurricane Zeta, than with some other recent Gulf Coast storms such as Sally, whose impacts were largely in the Gulf region.
Aon’s Impact Forecasting explained that hurricane Zeta weakened to a tropical storm over Alabama, but then moved rapidly allowing tropical storm force winds to spread well inland.
Tropical Storm Warnings were issued across northern Georgia and spanning the southern Appalachians – including eastern Tennessee, southwest Virginia, and northwest North Carolina, the company explained.
Impact Forecasting reports “multiple instances of damage to structures and homes” in the Carolinas from hurricane Zeta, as well as impacts to property across parts of Georgia and around the Atlanta metro.
Hurricane Zeta’s storm surge was almost as high as recent Delta, while the top wind speeds recorded on land were around 112 mph in Louisiana, but gusts of over 90 mph were recorded as far away as Mobile Bates, Alabama.
The inland impacts seen with hurricane Zeta could elevate the ultimate insurance and reinsurance market loss with hurricane Zeta, meaning that while a little weaker than some of the other storms seen, its industry loss could still reach a little higher than originally expected.
Impact Forecasting said that with Zeta, “The widespread swath of damage across Louisiana, Mississippi, Alabama, Georgia, and the Carolinas was likely to result in an overall direct economic loss well into the billions (USD).
“A majority of the wind-related damage was anticipated to be covered by insurance, which will also lead to at least a billion-dollar payout (likely higher).”
Sources had been discussing an industry loss of between $1 billion to $3 billion, but given the impacts further north, hurricane Zeta could perhaps see its losses reaching above that level, especially if including any impacts to offshore energy and flood insurance impacts taken by the NFIP, perhaps taking Zeta closer to Sally levels of industry loss.