Zeta to cause up to $5bn in insured losses: RMS
Total onshore US insured losses from Hurricane Zeta will come in at between $3 billion and $5 billion, according to an estimate by RMS, the catastrophe risk solutions company.
The estimate includes losses to the National Flood Insurance Program (NFIP) of between $200 million and $300 million and wind and storm surge losses across the impacted states, including Louisiana and Mississippi. RMS predicted a 5 percent reduction in insured onshore losses due to the cumulative impacts of Hurricane Sally, which damaged some of the same region earlier this season.
Losses reflect property damage and business interruption to residential, commercial, industrial, and automobile lines of business, along with post-event loss amplification (PLA) and non-modeled sources of loss. RMS expects most insured losses will be from residential lines.
Additionally, RMS estimates insured losses to offshore platforms, rigs, and pipelines in the Gulf of Mexico to not exceed $500 million from wind and wave-driven damages.
RMS estimates are based on analysis of ensemble footprints in Version 18.1 of its North Atlantic Hurricane Model. Losses associated with inland flooding are expected to be negligible, due to Zeta’s fast forward speed post-landfall, which kept high rainfall totals to isolated areas, RMS said.
Jeff Waters, senior product manager for RMS North Atlantic hurricane models, predicted some overlap between Zeta and Sally as the industry settles losses from these two events. “Our Development Team found that approximately 20 percent of zip codes impacted by Zeta were also impacted by Sally, particularly at lower wind speeds,” he said. “The overlap in the worst-affected areas of these two storms appears to be minimal. Thus, we expect a smaller loss reduction factor compared to the Delta and Laura events, largely attributed to structures in the overlapping region that sustained some, but not total damage from Sally, followed by additional damage from Zeta.”
Rajkiran Vojjala, vice president of model development at RMS, emphasised the impact of power outages and treefall from Zeta. “The storm’s fast forward speed brought damaging winds well inland, particularly in areas with an abundance of trees, including metro Atlanta. This, combined with already saturated soil conditions, led to one of the most significant power outages of the season.”
Pete Dailey, another vice president of model development at RMS, added: “[Zeta’s] fast forward motion–common for events that occur later in the season–reduced material water-driven impacts along the Gulf coast. However, that rapid movement brought hurricane-force winds well inland before Zeta finally weakened. In this unprecedented 2020 season, Zeta is another reminder that the season is far from over.”