2022 hurricane season

Hurricane Nicole is approaching the Florida coastline with Category 1 winds and the massive storm has continued to expand, promising impacts for a significant portion of the state, as well as the region to the north.

Tropical storm Nicole is nearing hurricane strength, having expanded again as it approaches Florida’s east coast, while hurricane warnings remain in effect for Florida, and the NHC continues to forecast the storm will become hurricane Nicole prior to making landfall.

The National Hurricane Center (NHC) warns of a “prolonged period of hazardous weather” for much of Florida state as subtropical storm Nicole has formed northeast of the Bahamas and is expected to bear down on Florida’s east coast, with near hurricane force winds seen as a possibility and storm surge likely.

The Florida insurance market capital stack is likely decimated after hurricane Ian’s landfall last week, raising the question of how this marketplace replenishes it and also highlighting the need for access to efficient sources of capital.

Alternative capital investors are about to have their resilience tested again, according to S&P Global Ratings, who said that although it is too early to have an accurate quantification of industry losses from hurricane Ian, it’s clear this is a major event for the reinsurance and ILS sector.

Some further data points on the catastrophe bond market impact from hurricane Ian have come to light, in the form of pricing sheets and also some output from modelling company tools that generate loss estimates information specifically for the cat bond market and insurance-linked securities (ILS) investors.

Early indications from catastrophe bond funds that price or mark their net asset values more regularly, or managers we’ve spoken with, suggest a roughly mid-single digit decline, on average, for the cat bond fund market in response to hurricane Ian.

After hurricane Ian, there is the potential for “significant” erosion to aggregate catastrophe bonds, according to investment manager Twelve Capital.

KatRisk, a specialist provider of catastrophe modeling solutions for flood and wind risk, has published an estimate of wind, surge and flood related economic losses from hurricane Ian, pegging the total at $46 billion, but that figure could be plus or minus $16.1 billion.

Hurricane Ian is approaching its second landfall on the South Carolina coast today, with sustained winds of 85 mph and gusts estimated at just over 100 mph, while a life threatening storm surge is forecast for parts of the seaboard.