It’s clear now that hurricane Irene will come very close to New York city and that on her passage to the north she will affect many of the major northeast U.S. population centres. Hurricane Irene is a Category 1 storm with maximum sustained winds of 80mph. By the time she reaches the New York area Irene is expected to have weakened to winds of 75mph.
Despite the weakened state of hurricane Irene this is still a dangerous storm with the potential to cause significant damage. Flooding is now as much a risk as wind damage as Irene is expected to drop 7 to 10 inches of rain on her path and bring a large storm surge with her. However, even though the path Irene is following could have caused a near worst case loss had she remained a strong Category 3 storm, it now looks like the insurance industry will be spared the worst. Had Irene brought winds of 120mph+ to the Jersey, New York and New England areas it would have likely equated to a $20 or $30 billion+ insured loss for the industry. Now, it looks more like the bulk of any economic loss will be caused by the massive shut down of services and commercial businesses across the U.S. northeast.
We’ll update you when we have figures and loss estimates from our sources. We don’t expect to see any impact to catastrophe bonds from this hurricane now due to the weakened state of hurricane Irene. You can see hurricane Irene’s latest position below and track her progress on our 2011 Atlantic Hurricane Season page.