As tropical storm Idalia continues to develop, the latest from the NHC forecasts a Category 3 major hurricane Idalia will approach the Florida coastline, leading BMS Senior Meteorologist Andrew Siffert to highlight the potential for any storm of this kind to be a multi-billion dollar insurance and reinsurance market loss event.
In his latest update on the development of what will be hurricane Idalia, BMS’ Siffert also cautions that Tampa is still within the forecast cone of uncertainty.
“A major hurricane in any section of Florida that extends into the Southeast states is likely a multi-billion dollar insurance industry event,” Siffert explains.
Adding, “However, it is too soon to provide a narrowed loss range because there is still a 30% probability, based on the super ensemble, that Idalia could impact Tampa at this time with the metro areas still within the National Hurricane Center cone of uncertainty.
“These scenarios are pretty eye-opening, so the next 24 hours are critical as we observe what the ultimate track for Idalia will be so the industry impacts can be fine-tuned.”
As we reported this morning, Idalia is the first serious threat to Florida as well as the insurance, reinsurance, catastrophe bond and insurance-linked securities (ILS) industry of the 2023 Atlantic hurricane season, with the NHC forecasting the storm to reach major Category 3 sustained wind speeds.
We explained that Idalia is forecast to become a hurricane later today, from which time there remains little standing in the way of hurricane Idalia and rapid intensification to near or above major Category 3 strength, before the winds and surge impact the Florida Gulf Coast.
You can see the latest location for Idalia below, using Tomer Burg’s map, which shows the NHC cone and wind speed forecasts as well:
As you can see, the NHC data suggests sustained wind speeds of around 115 mph right up to landfall on Florida’s Gulf Coast on Wednesday.
In his update, BMS’ Siffert also notes that another major hurricane landfall in Florida would mark “a major reversal from the lack of major hurricane landfalls between 2006 and 2016.”
“Hence, there is clearly a revision to the mean when it comes to U.S. landfall activity, with the long-term rate for hurricane landfall being around 1.6 events per year and major hurricane one every other year,” Siffert writes.
The NHC stated in its latest update on storm Idalia, “Idalia is forecast to become a hurricane later today and a
dangerous major hurricane over the northeastern Gulf of Mexico by early Wednesday.”
Storm surge heights of 7 to 11 feet are forecast for parts of Florida from Aucilla River, FL to Chassahowitzka, FL. Tampa Bay is forecast to experience storm surge heights of 4 to 7 feet.
While the Gulf of Mexico is incredibly warm, with plenty of 30 C and above water for hurricane Idalia to feed off, Siffert does note environmental factors that will determine the storms ability to intensify to the level currently forecast.
“Idalia is expected to follow a relatively narrow channel of north–north-eastward steering currents that are between an upper low over the Western Gulf of Mexico, a deep trough that is responsible for much of the heat relief this weekend over the Central Plains, and the subtropical ridge over the Southwest Atlantic. These currents will accelerate Idalia north, then north–northeast late Tuesday and early Wednesday. Exactly how these different airmass interacts with Idalia will be critical in determining how strong Idalia will be at landfall,” he explains.
He adds that the time spent over the warm waters, so dependent on forward speed, as well as any dry air, could be “the wildcard to limit the maximum potential intensity.”
Siffert also noted that there appears less uncertainty over the forecast track than with last year’s hurricane Ian, saying that, “a high degree of confidence can be put on the current NHC Cone of Uncertainty.”
Some of the region covered by that cone is relatively low in terms of population density, with overall lower insurance industry exposure, which could “limit top-end loss,” Siffert says.
He also said that the track uncertainty should narrow tomorrow, which will give modellers a greater ability to begin projecting potential industry loss impacts for the insurance, reinsurance and ILS markets.
Siffert writes, “This will be provided tomorrow as the track uncertainty starts to narrow, and the industry can hopefully take some of the larger loss scenarios off the table, which would involve the Tampa Bay Metro area. Until then, the loss range is wide given this possible ensemble scenario of a 30% chance of Tampa Metro area impact. These loss scenarios are pretty eye-opening, which means the next 24 hours are critical to see what the ultimate track for Idalia will be so the industry impacts can be tuned the impacts. Regardless, a major hurricane into any section of Florida that extends into the Southeast states is likely a multi-billion dollar insurance industry event.”
The summary is that hurricane Idalia is expected to intensify as it approaches a Florida landfall and while there are some factors that could limit that intensity, the chances of a major hurricane impact appear significant, with a corresponding threat to lives and property.
Defining the quantum of insurance, reinsurance and perhaps ILS market loss is difficult still, while uncertainty remains, but any major hurricane impact in Florida and surrounds, as Siffert says, has the potential to drive significant market losses into the billions of dollars.
Track storm or hurricane Idalia and the entire 2023 Atlantic tropical storm and hurricane season on our dedicated page and we’ll update you as new information emerges.