Tropical storm Cristobal is estimated to have caused an insurance and perhaps to a degree reinsurance market loss of around $150 million by catastrophe risk modeller Karen Clark & Company (KCC).
However, tropical storm Cristobal has now become extratropical as it moved up the United States and some impacts are continuing to be seen at this time, with storm force winds north of the Great Lakes and rainfall continuing to drive some flooding.
KCC’s industry loss estimate for tropical storm Cristobal is therefore likely a little soon to capture the full range of both tropical and extratropical impacts, but provides an early look at the potential insurance market impacts, which can inform the reinsurance market about any potential for losses to come its way.
For now though, it seems Cristobal is most likely to be a loss that is retained in the insurance market, given the estimate is only for an up to $150 million industry impact.
This is based on privately insured wind and storm surge damage to residential, commercial, and industrial properties, as well as automobiles, it does not include NFIP losses, so on that basis it seems reinsurance layers will largely be in the clear, although any insurers with specific exposure may have quota share arrangements that assist in their claims payment process.
Tropical storm force winds were restricted to coastal areas, KCC explains, adding that below tropical storm force winds impacted multiple states from Louisiana to Michigan.
Tropical storm Cristobal was particularly large for an early season storm, so impacts were widely felt.
However, right now, after extratropical transition, Cristobal is back to storm force sustained winds of 40 mph with higher gusts as the remnants of this storm track into Canada.
KCC explained the expected storm impacts, largely for the coastal areas, “No major structural damage is expected from Cristobal’s maximum sustained winds, but power outages have been reported in Mississippi, Louisiana, and Alabama. Minor coastal flooding from storm surge impacts were experienced from Atchafalaya, Louisiana, to Pensacola, Florida, with more significant flooding near Lake Pontchartrain in Louisiana, Waveland, Mississippi, and Mobile, Alabama.”
Track the 2020 Atlantic tropical storm and hurricane season on our dedicated page and we’ll update you as new information emerges of relevance to insurance, reinsurance and ILS markets.