RMS, the world’s leading catastrophe risk solutions company, estimates total onshore U.S. insured losses from Hurricane Zeta to be between US$3 and US$5 bn. The estimate includes losses to the National Flood Insurance Program (NFIP) of between US$200m and US$400m.
This estimate includes wind and storm surge losses across the impacted states, including Louisiana and Mississippi, based on analysis of RMS ensemble footprints in Version 18.1 of the RMS North Atlantic Hurricane Model. RMS ensemble footprints are reconstructions of Zeta’s hazards that capture the uncertainties surrounding observed winds and storm surge. 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.
The RMS estimate includes a 5% reduction in insured onshore losses due to the cumulative impacts of Hurricane Sally, which damaged some of the same region earlier this season.
“We do expect some overlap between Zeta and Sally as the industry settles losses from these two events, but not to the degree of Delta and Laura a few weeks ago. Our Development Team found that approximately 20% of zip codes impacted by Zeta were also impacted by Sally, particularly at lower wind speeds. 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,” said Jeff Waters, Senior Product Manager, RMS North Atlantic Hurricane Models.
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.
“Power outages and treefall-driven impacts were two key factors in 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. Some fallen trees also directly damaged buildings and vehicles. We expect these factors to amplify insured losses.” said Rajkiran Vojjala, Vice President, Model Development.
The estimate also includes losses to the NFIP in the range of US$200 million to US$300 million. NFIP losses were derived using the RMS view of NFIP exposure based on 2019 policy-in-force data published by the Federal Emergency Management Agency (FEMA), and the Version 18.1 North Atlantic Hurricane Models.
In Mexico, RMS estimates insured losses from Zeta to be minimal. However, consistent with previous impactful tropical cyclone events this season, overall insured losses constitute a fraction of the total economic losses, particularly in Mexico which has significantly lower rates of insurance take-up compared to the U.S.
Additionally, RMS estimates insured losses to offshore platforms, rigs, and pipelines in the Gulf of Mexico to not exceed US$500m from wind and wave-driven damages. While platforms in the Central Gulf of Mexico are built with higher deck heights to negotiate wave hazard, Zeta exposed a significant number of state lease platforms to high winds and waves along the Louisiana coast. Offshore losses are based on the October 2020 vintage of the RMS Offshore Platform Industry Exposure Database.
Zeta made landfall near Cocodrie, Louisiana on Wednesday, October 28, 2020 as a Category 2 hurricane on the Saffir-Simpson Hurricane Wind Scale. At landfall, Zeta produced sustained winds of 110 mph (177 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 landfall. Consistent with several previous events this season, the landfall location and timing were well forecast by the HWind forecasting products more than 72 hours before landfall.
“Despite encountering cooler waters and strong wind shear in its approach, Zeta managed to intensify before making landfall in Louisiana, nearly achieving major hurricane status. The storm’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,” said Pete Dailey, Vice President, Model Development.
Hurricane Zeta was the twenty-seventh named storm of the 2020 North Atlantic hurricane season, the eleventh hurricane, and the sixth U.S. landfalling hurricane of this extremely active season. Zeta was the eleventh named storm to make landfall in the contiguous U.S. so far in 2020, and a record-breaking fifth named storm of 2020 to make landfall in Louisiana. One month remains in the Atlantic hurricane season, ending officially on November 30.
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.