BOSTON, Aug. 26, 2011 -AIR Worldwide estimates that insured losses in the Caribbean from Hurricane Irene will be between USD 500 million and USD 1.1 billion. AIR expects the Bahamas will account for more than 60% of the insured loss-between USD 300 million and USD 700 million. This estimate includes wind and precipitation-induced flood damage to insured onshore residential, commercial and industrial properties (and their contents), automobiles, and business interruption losses in the Bahamas, Puerto Rico, Dominican Republic, Turks and Caicos, and other Caribbean territories.
Hurricane Irene has exited the Bahamas after weaving a path of more than 500 miles through the entire length of the archipelago. As of the National Hurricane Center’s 8:00 AM EDT advisory, the storm is located 375 miles south-southwest of Cape Hatteras, North Carolina and has weakened slightly to Category 2, with maximum sustained winds of 110 mph. It is moving north with a forward speed of 14 mph. Hurricane-force winds extend up to 90 miles from the center, and tropical storm-force winds extend up to 290 miles from the center of the storm.
On its current projected path, Irene is expected to reach the U.S. east coast by Saturday afternoon, making landfall on the Outer Banks of North Carolina with maximum sustained winds of 120 mph (Category 3). A hurricane warning is currently in effect for the entire North Carolina coast and north to Sandy Hook, New Jersey. Tropical storm force winds are expected to begin affecting the Carolinas tonight.
Hurricane Irene’s passage yesterday through the northwestern Bahamas has caused significant wind and flood damage to Abaco, Cat, and Eleuthera islands. There are reports of downed trees and significant roof damage throughout the region, but with severe disruptions to telecommunications and power networks, damage reports have been sparse thus far. Up to one foot of total rainfall accumulation was expected in parts of the country, and winds exceeding 130 mph have been recorded.
“Fortunately, Irene tracked east of densely populated New Providence Island and Grand Bahama Island, subjecting them to only tropical storm force winds,” said Scott Stransky, scientist at AIR Worldwide. Officials report limited impact on popular tourist resorts on these islands and expect them to resume operations soon. In the capital city of Nassau, located on New Providence Island and home to nearly a quarter million people, trees were downed, streets were flooded, and debris was strewn throughout. The Straw Market in downtown Nassau, a popular tourist shopping center located in a metal-framed canvas tent, was destroyed.
According to AIR, Bahamas was among the first Caribbean territories to adopt building codes, which are very stringent and highly enforced. This will help limit severe structural damage to a certain extent. Houses in the Bahamas are typically constructed using concrete block or poured concrete, although unreinforced masonry and timber construction are also used. Most residential dwellings are single story,
while commercial buildings can be mid- or high rise. “At Category 3 wind speeds, non-engineered structures can experience significant damage to the building envelope and the openings and can sustain structural damage if not properly anchored,” explained Stransky. “Engineered structures can also sustain significant damage to cladding and openings, if not properly protected. Additionally, Category 3 winds are expected to cause widespread damage to signage, trees, and electricity poles. Business interruption losses may also be significant from both direct physical damage to hotels and resorts, as well as damage to supporting utilities.”
In 1999, Hurricane Floyd battered the northwestern Bahamas with Category 3/Category 4 winds, causing widespread damage and disruption to several islands. Reported insured losses, trended to 2009 dollars, were approximately USD 400 million in the Bahamas. Like Irene, Hurricane Floyd was a very large storm, with tropical storm force winds extending some 580 miles across. In contrast to Hurricane Irene, however, Floyd passed to the east of the islands, meaning that its strongest winds on the right side of the storm remained over water.
“Because Irene tracked west of several islands-including Abaco Island, which contains the third highest insured property value after New Providence and Grand Bahama-it is likely that losses in the Bahamas from Hurricane Irene will be higher than those from Hurricane Floyd,” said Stransky. “Irene’s large size meant that almost all of the Bahamas was subject to strong winds for more than a day-a factor taken into consideration when modeling losses.”
Earlier this week, Irene passed through Puerto Rico at tropical storm/Category 1 strength, causing extensive flooding and triggering dozens of landslides. Later, the storm passed sufficiently to north of the Dominican Republic to keep wind damage minimal, but excessive precipitation caused several rivers to burst their banks, causing severe flooding and sweeping away many poorly-constructed houses.
AIR will continue to closely monitor the progress of the storm as it approaches the U.S. east coast and will provide updates later today.
About AIR Worldwide
AIR Worldwide (AIR) is the scientific leader and most respected provider of risk modeling software and consulting services. AIR founded the catastrophe modeling industry in 1987 and today models the risk from natural catastrophes and terrorism in more than 50 countries. More than 400 insurance, reinsurance, financial, corporate, and government clients rely on AIR software and services for catastrophe risk management, insurance-linked securities, detailed site-specific wind and seismic engineering analyses, agricultural risk management, and property replacement-cost valuation. AIR is a member of the Verisk Insurance Solutions group at Verisk Analytics and is headquartered in Boston with additional offices in North America, Europe, and Asia. For more information, please visit www.air-worldwide.com.