By Scott Vincent
Dec 20 - (The Insurer) - At the midpoint in 2024, fears over the potential impact of the Atlantic hurricane season were heightened by a series of forecasts that pointed to significantly above-average activity.
These fears were compounded when Beryl became the strongest hurricane on record to develop within the Atlantic Basin’s main development region prior to the month of July.
The storm would go on to become the earliest Category 5 hurricane on record, further compounding fears about the season ahead.
Despite these early season fears, there was a prolonged lull in activity during what is typically the peak period of the season.
After Ernesto’s dissipation in mid-August, close to three weeks followed without a named storm before Francine’s formation on 9 September.
The two meaningful insured events from the season both made landfall in Florida within 12 days of each other in late September/early October.
Following landfall, losses from Helene were initially expected to be in low to mid-single-digit billions of dollars. Expected losses have shifted upwards as more clarity has emerged on the extent of damage from the storm.
Milton was very nearly a game changer for the industry, with the storm threatening a direct hit on Tampa Bay that could have generated insured losses of $100bn or more.
The storm eventually made landfall as a Category 3 hurricane in nearby Sarasota. Wide-ranging loss estimates followed, and even months later there remains little clarity around the ultimate cost to the industry.
Modelled loss estimates issued in the aftermath of the event ranged from $17bn to $50bn, but there was limited evidence on the ground to suggest where losses might have arisen at this scale.
Verisk’s Property Claim Services (PCS) unit initially estimated losses at just $5bn before issuing a second estimate (ahead of its normal timeframe) which pegged losses at $14.7bn.
KBW analyst Meyer Shields said widespread concerns over the accuracy of PCS’ Milton estimate had led to delayed renewal signings compared with past Decembers.
The third quarter also brought elevated loss activity in Canada following a series of events as well as further flooding in Europe.
Below we highlight some of the key events from the second half of 2024:
Hurricane Beryl
Beryl made landfall as a strong Category 4 hurricane in Carriacou, part of Grenada, on 1 July before subsequent landfalls in Quintana Roo, Mexico (Category 2) and Texas (Category 1).
Modelled estimates for Beryl’s US impacts suggest insured losses ranging from $2.5bn to $4bn. Karen Clark & Co estimated insured losses from the event at $2.7bn, compared with midpoint estimates of $3.5bn from Moody’s RMS, $3bn from CoreLogic and $2.5bn from Verisk.
Moody's RMS said the industry will take a maximum $1.5bn hit from Beryl’s journey through Mexico and the Caribbean.
Canada hit by wildfire, hail, flood and Debby losses
While Debby made landfall as a Category 1 hurricane in Florida, its most notable impacts came as remnants from the storm tracked across southern Quebec on 9 and 10 August. Close to C$2.5bn ($1.7bn) in insured damage resulted from the event, one of several to impact Canada during the second half of the year.
A hailstorm that hit the Calgary area in August generated an estimated C$2.8bn in insured losses, according to CatIQ.
August also saw notable insured losses from a wildfire in the municipality of Jasper and Jasper National Park (C$880mn+) while flash flooding in Toronto and other areas of southern Ontario in July left carriers with an estimated bill of at least C$940mn.
Typhoon Yagi (early September)
This year’s northwest Pacific typhoon season saw notable losses in early September from Yagi, which struck the Philippines, the Chinese island of Hainan and the southern tip of the Chinese province of Guangdong before making landfall in north Vietnam.
Yagi was equivalent in strength to a Category 3 hurricane at the time of its landfall in Vietnam, and is the strongest storm on record to impact the country. Insured losses were likely in the region of ~$500mn.
The storm caused the International Federation of Red Cross and Red Crescent Societies’ Disaster Response Emergency Fund insurance policy to be triggered for the first time.
Central European Floods (mid-September)
Europe was hit by further flooding in mid-September, with the majority of losses occurring in Austria, the Czech Republic and Poland.
Loss aggregator Perils has estimated insured losses from the event at €2.08bn, bringing the tally for European flood losses in Europe in 2024 to more than €7bn.
Senior reinsurance sources have suggested some of the worst hit territories could see renewal price increases of 20 percent plus at 1.1.
Hurricane Helene
The first of two major hurricane landfalls in Florida within the space of two weeks, Helene came ashore in the state’s Big Bend region but its swathe of damage was widespread.
While initial projections pointed to a loss in the mid-single-digit billions of dollars, this was soon revised upwards as the scale of damage became clearer.
The loss picture in some parts of the state was further complicated by the arrival of Hurricane Milton so soon after.
Hurricane Milton
With maximum sustained winds reaching 180 mph as Milton powered through the Gulf of Mexico, Tampa Bay’s long run without a direct hit from a major hurricane looked to be coming to an end.
Milton’s late shift, which meant the storm tracked to the south of Tampa Bay rather than just to the north, ended the potential for a $100bn+ loss that would have had significant ramifications both for the local population and for the wider (re)insurance sector.
Since landfall there has remained uncertainty around the cost of Milton, with initial modelled projections suggesting an insured loss anywhere between $17bn and over $50bn. Over time, market sentiment has suggested Milton losses were considerably below initial estimates.
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