Recent tropical storm Fay, which took the record as the earliest F named storm in history as it targeted the U.S. northeast region, is estimated to have caused an insurance market loss of roughly $400 million by catastrophe risk modeller Karen Clark & Company (KCC).
Tropical storm Fay formed off the North Carolina coast on July 9th and headed north, with the storm gaining structure and wind speed strength to become a strong tropical storm with sustained winds of around 60mph before it headed for a landfall in the northeast U.S. on July 10th.
Tropical storm Fay made landfall just north of Atlantic City, New Jersey, and continued north through New York, with its sustained winds weakening as it passed through this area of particularly high insurance and reinsurance market exposure.
KCC explained that parts of Maryland, Delaware, New Jersey, Pennsylvania, and New York all saw damaging winds from tropical storm Fay.
Some power outages were reported in New York and New Jersey, although these were largely quickly resolved.
The most likely impacts from tropical storm Fay are light wind damage, but some structural damage is possible from trees falling on buildings, KCC said.
The catastrophe risk modeller highlighted that in New York City alone hundreds of downed trees were reported, while parts of New Jersey and Pennsylvania, among other areas, also experienced tree damage that resulted in infrastructure disruption.
Low levels of storm surge were also seen along a swathe of the U.S. eastern seaboard from South Carolina to New York.
Having run its catastrophe risk model, KCC believes that tropical storm Fay will result in an estimated close to $400 million of losses that fall to the insurance market.
At that low-level losses to reinsurance capital would be expected to be minimal.
KCC said its estimate includes privately insured wind and storm surge damage to residential, commercial and industrial properties, as well as automobiles. But it does not include any NFIP losses.
Tropical storm Fay’s formation off the U.S. east coast and track into high-value New York and New Jersey provides a stark warning of what could be to come as the 2020 hurricane season progresses.
With a little more time over warmer waters Fay could easily have had time to intensify into a hurricane before its landfall, with the resulting damage higher.
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.