PIA NE IA EVENTS damages in1992 dollars. Only $15.5 billion of that was insured which meant losses to society in general hit $11 billion.
The Weather, Hurricanes & a Dire Prediction
Swiss Re took a look at Hurricane Andrew — which is the most devastating storm to ever hit Florida — and at what those damages would be if the same storm hit today. Those losses would be $80 to $100 billion and only $50 to $60 billion would be covered by insurance.
The U.S. Climate Center says we’re not likely to see El Nino this winter. Oddsmakers at the center say the odds have fallen to 14% by the end of 2017 from above 50% earlier this year. Meanwhile, the chances of seeing a La Nina has gone to 27% in December of this year to February of next. Michelle L’Heureux of the Climate Prediction Center said, “The chances for El Nino have really diminished. From last month to this month we are now favoring La Nina with slightly higher chances, but overall we are strongly favoring neutral.” was just 17% a month ago. What does that mean? El Nino will put the brakes on hurricanes in the Atlantic and cause above average numbers of droughts and floods elsewhere. La Nina will keep the U.S. South warm and dry and bring colder weather to the Northern portions of the country. As for hurricanes, August to early October is the busiest part of the annual hurricane season. So far, this year we’ve seen above-average storm activity but the August-October time period usually produces the most expensive storms. The Atlantic is the warmest this year that it’s been since 1950 and that means the likelihood of more storms and — worse — more intense storms during that time frame. And what if one of those predicted hurricanes managed to have the same intensity of Hurricane Andrew which hit South Florida in mid-August of 1992. It did $26.5 billion in
Having a little bit of fun with the data, Swiss Re moved the hurricane’s path 20 miles north to a direct strike on Miami. Losses then would be $100 billion to $300 billion and it would be the costliest disaster in U.S. history. And only a little over 50% of that $100 billion to $300 billion would be covered by insurance. Martha Schwartz of Swiss Re put it in perspective. “The results serve as a wake-up call to the insurance industry, homeowners, small businesses, public officials and the private sector. A common response is ‘sticker shock,’ as some of the numbers are hard to fathom and rather unsettling. Although it is certainly difficult to wrap your mind around an economic loss in the range of USD 300 billion, it is critical in order to truly address present-day hurricane risk,” she said. Another worry? The U.S. is getting complacent since we haven’t seen a major hit on U.S. soil since Wilma in 2005. “Additionally, the US has not experienced a major (Category 3 or greater) hurricane landfall since Wilma in 2005. This extended quiet period can lead to complacency, and insurance take up rates begin to drop as memories of hurricanes fade. However, it is critical to point out that this quiet period does not translate to decreased risk: it’s not a matter of if a major hurricane will barrel through South Florida, but when,” Schwartz added. Sources: Insurance Journal, Carrier Management, Insurance Business America
August 2017 | Main Street Industry News | www.pianeia.com | 35