RMS Estimates Hurricane Sally Losses May Reach $3.5bn

 RMS, the world’s leading catastrophe risk solutions company, estimates that total U.S. insured losses from Hurricane Sally will be between US$2.0 and US$3.5 billion. The estimate includes losses to the National Flood Insurance Program (NFIP) of between US$400m and US$800m.

“Sally made landfall with much stronger winds than expected. While it weakened considerably as it moved inland, the slow-moving nature of the storm brought persistent wind and storm surge to much of the Gulf coastline, combined with heavy rainfall and widespread flooding to interior regions. Sally is another example of how hurricane damage can take many different forms”, said Jeff Waters, senior product manager, RMS North Atlantic Hurricane Models.  

This estimate includes wind, storm surge, and inland flood losses across parts of the Gulf and Florida regions, based on analysis of RMS ensemble footprints in Version 18.1 of the RMS North Atlantic Hurricane Models and estimates from the RMS U.S. Inland Flood HD Model. RMS ensemble footprints are reconstructions of Sally’s hazards that capture the uncertainties surrounding observed wind speeds and storm surge.

Losses reflect property damage and business interruption to residential, commercial, industrial, and automobile lines of business. Estimates include post-event loss amplification (PLA) and non-modeled sources of loss. RMS expects the majority of insured losses will impact residential lines.

The estimate also includes losses to the National Flood Insurance Program (NFIP), which RMS expects to reach US$400 million to US$800 million. NFIP losses were derived using an RMS view of NFIP exposure based on the 2019 policy-in-force data published by FEMA, the Version 18.1 North Atlantic Hurricane Models, and the U.S. Inland Flood HD Model. 

“We expect Sally to be a sizable event for the NFIP. The majority of NFIP take-up occurs in coastal counties, especially in the states most impacted by the hurricane, notably Alabama and Florida. However, the inland extent of heavy rainfall from this event means we’ll likely see NFIP losses stemming from inland flood as well,” said Rajkiran Vojjala, Vice President, Model Development.  

Sally made landfall near Gulf Shores, Alabama on Wednesday, September 16, 2020 as a Category 2 hurricane on the Saffir-Simpson Hurricane Wind Scale. At landfall, Sally produced sustained winds of 105 mph (170 km/h), according to the National Hurricane Center. Informed by a suite of real-time observational data sources, RMS HWind products estimated comparable winds at and just after landfall. The landfall location was also well-forecast by the HWind forecasting products. 

“In the days leading up to landfall, our HWind forecasts consistently provided clients with scenarios indicating a potential Alabama landfall location, even prior to the NHC official forecasts trending east away from New Orleans. This event is another strong validation point in demonstrating the predictive value of these products,” said Pete Dailey, Vice President, Model Development. In the 24-36 hours following landfall, Sally weakened quickly as it tracked further inland into Georgia and parts of the Carolinas, before being downgraded to a “remnant low” on September 17.

Hurricane Sally was the eighteenth named storm of the 2020 North Atlantic hurricane season, the seventh hurricane, and the fourth U.S. landfalling hurricane of this very active season. Sally is the eighth named storm to make landfall in the contiguous U.S. so far in 2020, a new record for U.S. landfall activity as of mid-September.

RMS industry loss estimates for landfalling U.S. hurricanes are comprehensive, reflecting modeled and non-modeled impacts from all major drivers of damage, including wind, storm surge, and inland flooding.  

About alastair walker 4508 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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