The first tropical storm of the 2022 Atlantic hurricane season is expected to be named shortly, with the remnants of Pacific hurricane Agatha now having reorganised over the Gulf of Mexico and expected to shortly be named tropical storm Alex, with Florida the next land mass in its path.
Update, June 4th: Despite the fact this tropical system failed to be named Alex before it reached Florida, the storm system has caused widespread flooding across the southern half of the state, including in metro areas like Miami’s Downtown.
As a result, damage from water and flooding is likely to be prevalent and provide a real test for Florida’s insurance industry.
Demotech founder and President Joseph Petrelli told Artemis that despite not even being a named tropical storm, this system could cause dollar losses approaching that of a minor hurricane, if Florida’s litigation and property insurance fraud issues persist.
Tropical storm Alex, once named, is forecast to head across the Gulf of Mexico with a landfall on the west coast of the Florida peninsula expected on Saturday, somewhere along the Cape Coral, Bonita Springs, Naples stretch of coastline.
It marks a relatively early start to tropical storm season, but with forecasts suggesting another active hurricane season in 2022, this is an early warning of what could be to come for insurance, reinsurance and insurance-linked securities (ILS) market interests.
Being Florida that is in the cone of uncertainty, it’s also an early test for the state’s challenged insurers, for who weaker storms and rainfall related damages have been a problem in recent years, with attrition and litigation fuelled loss amplification a significant problem that has also led them to utilise reinsurance more in recent seasons.
Right now, soon to be tropical storm Alex is situated in the Gulf of Mexico north of Mexico’s Yucatan peninsula and the western end of Cuba.
With sustained winds of 40 mph already, so naming tropical storm Alex is really a formality now, the storm is forecast to head straight for Florida, intensifying as it goes, with some forecast models suggesting it could reach relatively strong tropical storm strength wind speeds by the time it gets there.
There is a slim possibility tropical storm Alex could become hurricane Alex, which is more likely after it crosses Florida, but this is seen as an outside chance at this time.
As well as tropical storm force winds, Alex is expected to bring torrential rainfall to Florida, with widespread amounts of between 4 to 8 inches and a storm maximum of 12 inches possible across South Florida and the Keys.
The NWS warns that, “This rain may produce considerable flash and urban flooding.”
In addition, a storm surge of between 1 and 3 feet is possible in certain areas of the Florida Gulf coast. Should Alex strengthen the surge warnings may be increased.
Wind speed probabilities for tropical storm Alex can be seen below (from TropicalTidbits.com).
Tropical storm Alex does not pose a particular threat to insurance and reinsurance interests, but should the storm gain more structure and intensify further than anticipated, it could still represent an early hurricane season test for Florida’s domestic insurance market.
Track the 2022 Atlantic tropical storm and hurricane season on our dedicated page and we’ll update you as new information emerges.