23 October 2014News

Gonzalo losses could cost insurers $400m

Catastrophe modelling firm AIR Worldwide has estimated that insured losses in Bermuda from Hurricane Gonzalo will range between $200 million and $400 million.

The firm said that the storm had weakened prior to landfall and that by the time the centre had passed over Bermuda, Gonzalo had weakened to a Category 2 hurricane.

“On Friday October 17, at 8:30 PM Atlantic Standard Time, the very centre of Gonzalo made landfall on the south-central coast of Bermuda. Gonzalo’s very large, 30-mile radius eye engulfed Bermuda; webcams on the island recorded an eerie calm for about 90 minutes before strong winds, coming this time from the opposite (westerly) direction, moved in once again,” said Scott Stransky, manager and principal scientist at AIR Worldwide.

“When the eye began to come onshore, the storm was still a Category 3 hurricane with 115 mph sustained winds. However, by the time the centre passed overhead, Gonzalo had weakened to a Category 2 hurricane, with 110 mph sustained winds.”

“The strongest observed winds at Bermuda International Airport were 93 mph sustained, with gusts of 113 mph. The storm weakened prior to landfall due to both lower sea surface temperatures and higher wind shear in the vicinity of Bermuda. Note that the centre of Tropical Storm Fay passed directly over the island less than a week ago. It is likely that Fay’s passage reduced the sea surface temperatures around Bermuda, allowing Gonzalo to be just slightly weaker than it might have been otherwise.”

AIR conducted a damage survey across Bermuda on October 19-20 and found that, in the areas surveyed, damage was mostly limited to roofs but structural damage was seen on older buildings, including some historical ones.

In 2003, Hurricane Fabian tracked just west of the island, with winds slightly higher than those from Gonzalo, causing losses of about $300 million (2003 USD values). AIR estimates that a recurrence of Fabian today—with today’s exposures—would result in insured losses of around $650 million.