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News » US » Predictions take shape for eventual hurricane costs » published 13 Sep 2017

Predictions take shape for eventual hurricane costs

Values in the tens of of billions are being put on the insured costs of the two recent hurricanes to hit the US, with a total economic cost in the hundreds of billions.

NASA image showing rainfall data as Irma moved over Georgia Above: NASA image showing rainfall data as Irma moved over Georgia

Weather forecasting business AccuWeather has predicted the economic cost of Harvey, Irma to be US$290bn.

Risk evaluation and management business RMS estimates the insured losses caused by Hurricane Harvey alone to be between US$25bn and US$35bn with an upper bound of US$40bn. The insured losses for the industry are only a fraction of the total economic losses which are estimated to be US$70bn and US$90bn.

This RMS estimate represents the insured losses associated with wind, storm surge, and inland flood damage, across Texas and Louisiana only. The estimate also includes gross losses accrued to the National Flood Insurance Program of US$7bn to US$10bn.

Economic costs are incurred by, but not limited to, disruptions to businesses, damage to homes and belongings, increased unemployment rates for weeks or months, crop losses and damage to transportation and infrastructure, pointed out AccuWeather.

“Although Harvey was a category four storm at landfall, the point of landfall along the coastline of Texas is less densely populated than other coastline areas, which has limited the magnitude of the overall total wind and surge related losses,” said Michael Young, head of US climates modeling at RMS. While wind and storm surge losses appear modest for a landfalling category four hurricane, RMS expects that significant losses associated with rainfall-driven flooding will drive total economic and insured losses in excess of those experienced from Superstorm Sandy in 2012.

He added: “The behavior of the storm is almost without precedent, and Harvey has already broken all U.S. records for tropical cyclone-driven extreme rainfall. Harvey's observed cumulative rainfall of 51in (129cm) far exceeds that of Allison in 200, Claudette in 1979, or Amelia in 1978, not only in volume but also in regional extent.”

RMS director for model product management Emily Paterson said that the actuality of Irma was not nearly as bad as feared. “Irma’s final path spared the major population centers of Miami and Tampa from the storm’s most damaging winds and storm surge,” she said.  

AccuWeather said that this has been the first time in the history of record-keeping that two Category 4 or higher hurricanes have struck the US mainland in the same year.

"That is extraordinary by itself," said AccuWeather founder, president and chairman Dr Joel Myers. "And also unprecedented is that this particular storm, Irma, has sustained intensity for the longest period of time of any hurricane or typhoon in any ocean of the world since the satellite era began.”

The storm has not only been intense, but also very large.

"We believe the damage estimate from Irma to be about $100 billion, among the costliest hurricanes of all time,” said Myers. “This amounts to 0.5 of a percentage point of the GDP of $19 trillion.

He added: "We estimated that Hurricane Harvey is to be the costliest weather disaster in US history at $190 billion or one full percentage point of the GDP. Together, AccuWeather predicts these two disasters amount to 1.5 of a percentage point of the GDP, which will about equal and therefore counter the natural growth of the economy for the period of mid-August through the end of the fourth quarter.”

MPU

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This article was published on 13 Sep 2017 (last updated on 13 Sep 2017).

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