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2017 Hurricane Season: Review and Analysis

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2017 Hurricane Season: Review and Analysis KCC WHITE PAPER 2017 Hurricane Season: Review and Analysis JUNE 2018 KCC White Paper: 2017 Hurricane Season: Review and Analysis ©2018 Karen Clark & Company. All rights reserved. This document may not be reproduced, in whole or part, or transmitted in any form without the express written consent of Karen Clark & Company. RiskInsight® is a registered trademark of Karen Clark & Company. Document Date June 2018 Contact Information If you have any questions regarding this document please contact: Karen Clark & Company 116 Huntington Avenue Boston, MA 02116 T: 617.423.2800 F: 617.423.2808 [email protected] © 2018 Karen Clark & Company | 1 KCC White Paper: 2017 Hurricane Season: Review and Analysis Contents Executive Summary ........................................................................................................... 3 Meteorological Highlights and Forecasts ...................................................................... 3 Modeled Loss Estimates................................................................................................. 5 Hurricane Harvey ............................................................................................................... 6 Meteorological Development ........................................................................................ 6 Real Time Loss Estimation ............................................................................................. 7 Post-Event Damage Survey............................................................................................ 9 Residential Structures ................................................................................................. 9 Commercial structures .............................................................................................. 12 Hurricane Irma ................................................................................................................. 16 Meteorological Development ...................................................................................... 16 Real Time Loss Estimation ........................................................................................... 19 Post-Event Damage Survey.......................................................................................... 20 Residential Structures ............................................................................................... 21 How much does it cost? ............................................................................................. 24 Commercial Structures ............................................................................................. 26 Storm Surge Damage................................................................................................. 27 Damage Observations from the Caribbean ................................................................. 29 Hurricane Maria ................................................................................................................ 31 Meteorological Development ...................................................................................... 31 Real Time Loss Estimation ........................................................................................... 32 Post-Event Damage Survey.......................................................................................... 33 Residential Structures ............................................................................................... 33 Commercial Structures ............................................................................................. 35 Hurricane Nate ................................................................................................................. 42 Meteorological Development ...................................................................................... 42 Real Time Loss Estimation ........................................................................................... 43 Conclusions ...................................................................................................................... 44 © 2018 Karen Clark & Company | 2 KCC White Paper: 2017 Hurricane Season: Review and Analysis Executive Summary The 2017 hurricane season was a notable one in many respects. From a meteorological perspective, several storms exhibited extreme values for intensity, duration, and/or rainfall amounts. Several islands in the Caribbean experienced their worst losses in decades, and there is still uncertainty around the final insured losses. Perhaps most notable was the wide discrepancy in the catastrophe model loss estimates for Harvey, Irma, and Maria (HIM). Meteorological Highlights and Forecasts . 2017 was the most active hurricane season since 2005 based on the Accumulated Cyclonic Energy (ACE) index, which is a measure of seasonal intensity and duration. Ten hurricanes, six of which became major hurricanes, formed in the Atlantic basin. Two major hurricanes made landfall in the US, ending a 13 year drought of major landfalling storms. Every state along the Gulf Coast was impacted by at least one hurricane. Two Category 5 hurricanes impacted Puerto Rico and other Caribbean Islands. Multiple storms, including Jose, Irma, and Maria, exhibited extreme wind speeds and/or duration. Named storms of the 2017 North Atlantic hurricane season. © 2018 Karen Clark & Company | 3 KCC White Paper: 2017 Hurricane Season: Review and Analysis In 2017, sea surface temperatures (SSTs) throughout the Atlantic were above average by 0.5-1.0°C. In addition, in the region most conducive to Atlantic hurricane genesis, SSTs were 0.23°C higher than the rest of the tropics. In May, NOAA forecast a 45 percent probability of an above-average season and a 35 percent probability of a near-average season. El Niño conditions had been anticipated to develop as the season progressed. This would have introduced characteristics, such as increased wind shear and lower SSTs, that would have inhibited storm formation. However, El Niño conditions did not materialize. In August, the outlook was updated to indicate a 60 percent chance of an above- average season. The minimal wind shear over the North Atlantic due to weak trade winds combined with the African Easterly Jet allowed tropical disturbances off the west African coast to gain cyclonic vorticity and increased the likelihood of tropical storm formation. By this time, the 2017 hurricanes were expected to be larger, longer lasting, and more numerous than average seasons. The 2017 North Atlantic hurricane season was characterized by fewer tropical cyclones than projected but there were more hurricanes and major hurricanes than forecast. 2017 Hurricane Season Statistics 20 18 16 14 12 10 8 6 4 2 0 Tropical Storms Hurricanes Major Hurricanes NOAA May Forecast NOAA August Forecast 2017 Season 30 Year Average (1980‐2011) Comparison of NOAA forecasts, the 2017 hurricane season, and the 30 year average. © 2018 Karen Clark & Company | 4 KCC White Paper: 2017 Hurricane Season: Review and Analysis Modeled Loss Estimates Perhaps the biggest surprise of the 2017 hurricane season was the wide disparity between the catastrophe model loss estimates. The chart below shows the three primary modelers’ industry loss estimates for HIM. These numbers are for the US only for Harvey and Irma, and they exclude NFIP losses. Harvey (US) Irma (US) Maria (PR) 80 72 70 60 ? 50 40 35 $ Billions 33 32 30 34 26 25 28 20 20 18 15 10 12 13 >10 0 KCC (9/1) AIR (9/6) RMS (9/9) KCC (9/13) AIR (9/15) RMS (9/20) KCC (9/28) AIR (9/25) RMS (9/29) Comparison of modeled loss estimates for Hurricanes Harvey, Irma, and Maria. Several things are notable about the industry loss estimates. KCC provided a best estimate for each storm; other modelers provided wide ranges. The actual losses aligned well with the KCC projected loss estimates for the industry as a whole and for individual insurers. KCC estimated that the privately insured loss, including the US and Caribbean, would total to $70 billion for the 2017 hurricane season. Hurricane Estimated Industry Loss ($ Billions) Harvey 15 Irma 25 Maria 30 Nate 0.5 Total 70.5 © 2018 Karen Clark & Company | 5 KCC White Paper: 2017 Hurricane Season: Review and Analysis Hurricane Harvey August 17-September 3 . First major landfalling US hurricane since Hurricane Charley (2004). Made landfall near Rockport, Texas, as a Category 4 hurricane with 132 mph winds. The storm’s slow motion, eventual stall, and location near the Gulf of Mexico led to historic flooding in and around Houston with rainfall in excess of 50 inches. Meteorological Development After forming as a tropical depression in the Atlantic, Harvey traveled westward south of the Caribbean and across the Yucatan Peninsula. The storm rapidly intensified over the Gulf of Mexico due to warm SSTs. Prior to making landfall near Rockport, Texas, Harvey became a Category 4 storm with 132 mph sustained wind speeds. KCC inland flood footprint for Hurricane Harvey generated on September 1. Hurricane Harvey’s track through the Caribbean Sea and Gulf of Mexico. High pressure regions over the US and the Atlantic caused Harvey to stall near Houston. Much of the storm’s circulation remained over the Gulf of Mexico, which prolonged the storm’s duration and provided a constant source of moisture for precipitation. Rainfall in excess of 50 inches from August 25-29 produced historic flooding in Houston and the surrounding areas. © 2018 Karen Clark & Company | 6 KCC White Paper: 2017 Hurricane Season: Review and Analysis After four
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