Tropical Storm Barry
Tropical storm Barry has formed in the Gulf of Mexico and has become the second named storm of the 2019 Atlantic hurricane season (Andrea being the first).
Barry made landfall early Saturday afternoon, 13 July as a weak Category 1 hurricane near Intracoastal City, Louisiana, and weakened to a tropical storm thereafter. Barry is expected to weaken further as it continues to move inland, and is currently forecast to weaken below tropical-storm strength over the next 24 hours.
Barry’s biggest threats were anticipated to be storm surge, torrential rainfall and corresponding flash/river flood along the Mississippi river. Preliminary weather reports seem to indicate that the impact of storm surge/rainfall is overall less catastrophic than anticipated. Notwithstanding, the flood warnings remain in effect.
There were numerous reports of downed trees and power lines throughout southern Louisiana and Mississippi, as well as some localised flooding and tornadoes across the two states.
Over the coming days the slow movement of Barry is still expected to result in heavy rainfall and flood threat from the central Gulf Coast north across the Lower to Mid-Mississippi Valley and potentially up to the Tennessee Valley.
Given the current weather reports and impact information available, Twelve Capital does not expect tropical storm Barry to drive insured losses to a significant level. Consequently, the storm is unlikely to have a noticeable impact on the portfolios.
As usual, Twelve Capital continues to closely monitor the ongoing situation and issue updated event reports if the current situation is deemed to have changed materially.
Other recent events
No new natural catastrophe events took place over the last two weeks that would be expected to cause major insured industry losses. The impact of these events on Twelve Capital’s portfolios is estimated to be negligible.
Damage assessments are ongoing from the earthquakes on 4 and 5 July in Southern California near Ridgecrest. The scope of the damage was limited due to the epicentre’s location in a sparsely populated area, with some damage to local infrastructure reported. Initial high-level estimates published by the USGS (US Geological Society) indicate a strong likelihood that the economic losses will be in the range of USD 100m up to USD 1bn, whereby the insured market loss can, therefore, be estimated to be lower by a multiple.
US severe weather and flooding
Severe thunderstorms, torrential rainfall and strong winds led to damage across the central and eastern US during the first week of July, with areas in Colorado, Wyoming, Nebraska, and South Dakota the worst hit. Meanwhile, heavy rains affected the Washington DC metropolitan area. The total economic costs for these storms is expected to be over USD 100m, mainly driven by hail damage in Colorado.
Seasonal rainfall led to additional flooding across southern China in the Yangtze River Basin for over 10 days in early July. China’s Ministry of Emergency Management stated that nearly 10,000 homes were submerged, and 130,000 hectares (321,000 acres) of cropland damaged with total economic losses estimated at USD 1.15bn. This number is likely to rise. Insurance protection penetration in China for this type of event, however, is generally very low. The impact of this event on the insurance market is therefore expected to be low.
Monday, 15 July 2019