A new report from modeling, data and analytics firm CoreLogic shows that despite the focus often being on Florida and the Gulf Coast states, the real exposure to hurricanes exists in the New York metropolitan area, including New Jersey and Long Island. Their report which looks at hurricane storm surge risk and damage potential across the U.S. finds that there is a massive $700 billion of U.S. residential property at risk and in New York metro alone $168 billion.
The 2012 CoreLogic Storm Surge report, which you can request a copy of here, provides the first-ever property-level analysis of residential property hurricane risk along the Atlantic and Gulf Coasts broken down by region and by individual state, as well as a snapshot of the risk by metro areas.
The report indicates that over 4 million homes across the U.S. are at risk from hurricane induced storm-surge damage with over $700 billion in total property exposure. The Atlantic Coast region contributes approximately 2.2 million homes at risk, valued at more than $500 billion, while the Gulf Coast is nearly $200 billion, with just under 1.8 million homes at risk for potential hurricane storm-surge damage.
“Though more frequently impacted states like Florida, Texas and Louisiana get the most attention when it comes to hurricane vulnerability and destruction, Hurricane Irene made it very clear last summer that hurricane risk is not confined to the southern parts of the country,” said Dr. Howard Botts, vice president and director of database development for CoreLogic Spatial Solutions. “That’s why we felt it was important this year to highlight storm-surge risk in a brand new way to establish a better understanding of exposure throughout the states that are most at risk of a direct hurricane hit. As we got a glimpse of during Irene, our 2012 report shows even a Category 1 storm could cause property damage in the billions along the northeastern Atlantic Coast and force major metropolitan areas to shut down or evacuate.”
“The summer of 2011 gave us some startling insight into the damage that even a weak storm can cause in the New York City metro area,” said Botts. “Hurricane Irene was downgraded to a tropical storm as it passed through New Jersey and New York City, but the impact of the storm was still estimated at as much as $6 billion. Economic losses mounted swiftly as businesses shuttered, the New York City mass transit system came to a sudden halt and emergency response teams were called into action to prepare for the worst.”
It’s important to note that the data used is the total property exposure to hurricane driven storm-surge and so does not mean that a single storm is likely to cause these levels of losses. However it should serve as a reminder to insurers and reinsurers that the risks are great, and even in a hurricane season which is forecast to be average (as this years is) a single storm impacting New York could be a huge industry event for insurers, reinsurers and catastrophe bond investors.
Read the full press release from CoreLogic here.