Hurricane Isaac damages could hit $1.5 billion

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Hurricane Isaac damages could hit $1.5 billion:

EQECAT estimates that ground-up damages will range from $500 million to $1 billion from this event.

Hurricane Isaac made landfall in southeastern Louisiana Tuesday evening, August 28, 2012 as a Category 1 hurricane with maximum sustained winds of 80 mph.

Hurricane force winds (sustained winds over 74 mph) do not appear to have extended to downtown New Orleans, however, tropical storm force winds were observed within New Orleans. Storm surge heights of between 6 to 12 feet have been observed along the Southeastern Louisiana and Mississippi coast and in combination with waves, coastal portions of the area have generated localized coastal flooding.

A floodwall was overtopped in Plaquemines Parish, south of New Orleans, but the fortified areas of New Orleans have withstood the event so far.

Hurricane Isaac is a slow-moving storm with projected accumulations of up to 17 inches of rain over the next few days. Many smaller rivers to the east of the Mississippi River are currently at flood stage or are projected to crest at or above minor to moderate flooding levels. The Mississippi River is expected to remain below flood stage.

Rising water elevations are expected to flood houses and other buildings later this week and into the weekend.

Using EQECAT’s Insured Exposure Data (IED) and EQECAT’s North Atlantic Hurricane Model, the insured loss estimate for onshore property (personal, commercial, and industrial, including time element) is expected to be between $500 million to $1.5 billion.

Economic losses to offshore energy assets (platforms, pipelines, and shut-in production) are expected to range from $500 million to $1 billion from this event (reliable insured exposure information is not available).

The center of Isaac first touched the tip of the Mississippi River delta around 6:45 pm CDT before slowly drifting west back over water. At 2:15 am CDT, the center came ashore just west of Port Fourchon on Louisiana’s southeast coast. Several hours before the center reached the coast, strong rain bands and the leading edge of the eyewall brought high gusts and heavy rains along the Mississippi coast and into southeastern Louisiana. Peak gusts, in mph, were reported in the range of 50’s to 70’s throughout the general landfall region and along the Mississippi coast.

There have been numerous reports of high storm tides and surge flooding throughout the landfall area. Most notable surge levels reported were Shell Beach, LA at 11 ft, Bay Waveland Yacht Club, MS at 10 ft, Pascagoula NOAA Lab, MS at 6 ft, and a Mobile, AL Coast Guard station at 6 feet. The new walls built by the Army Corps of Engineers held the biggest surge and appear to have remained intact. Combining EQECAT’s IED and proxy event IDs for Isaac with EQECAT’s North Atlantic Hurricane Model produces an insured loss estimate for onshore property ranging between $500 million to $1.5 billion from this event.

EQECAT’s IED represents estimates of total insured values derived from representative market exposure data, census demographics, macro economic data, building square footage data, and representative policy terms and conditions.

EQECAT’s insured loss estimates do not include expected recoveries from the National Flood Insurance Program (NFIP). EQECAT’s IED for offshore energy represents valuations and vulnerability characteristics of fixed, floating and underwater assets in the Federal waters of the Gulf of Mexico. The insurance coverage of this industry is dynamic and EQECAT cannot reliably estimate what portion of the ground-up damage to these assets is ultimately insured by private insurers.

EQECAT estimates that ground-up damages will range from $500 million to $1 billion from this event.

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