Francine may bring $1 billion in losses as it nears Louisiana – Gallagher Re
Francine may bring $1 billion in losses as it nears Louisiana – Gallagher Re | Insurance Business Asia
Reinsurance
Francine may bring $1 billion in losses as it nears Louisiana – Gallagher Re
Insurers brace for impact as storm’s intensity remains uncertain
Reinsurance
By
Kenneth Araullo
Tropical Storm Francine, projected to strengthen into a hurricane before hitting Louisiana, could cause $1 billion or more in private insured losses, according to a hurricane advisory from Gallagher Re.
The advisory noted that losses could rise into the low billions if the storm’s track shifts eastward toward the New Orleans metro area.
The National Hurricane Center has issued a hurricane warning for the Louisiana coast from Sabine Pass, near the Texas border, to Grand Isle, located south of New Orleans. The storm is expected to make landfall today.
Gallagher Re’s estimate for insured losses is based on the storm’s current trajectory, anticipated rainfall, storm surge, and Category 1 winds. Francine is still in the process of organizing.
The firm stated that the track of a hurricane plays a significant role in determining physical impacts and overall loss costs.
The $1 billion estimate aligns with losses from recent storms that made landfall in Louisiana. Gallagher Re added that this figure would be manageable for the insurance and reinsurance sectors.
Francine is forecast to hit Louisiana with winds of 90 mph. If the storm strengthens to Category 2, Gallagher Re noted that similar storms in Louisiana have led to insured losses in the low-to-mid single-digit billions.
The main factor influencing loss estimates is the storm’s uncertain path. The National Hurricane Center’s current projection suggests landfall in a less populated area of Louisiana, according to Gallagher Re.
A slight shift to the east, observed on Sept. 10, could bring hurricane-force winds to Baton Rouge and strong tropical storm winds to New Orleans and Lake Charles.
Francine would be the third hurricane to make landfall in the US this year and the first to hit Louisiana. Earlier in the season, Hurricane Beryl impacted Texas, while Debby struck Florida last month.
According to a September update from Colorado State University researchers, the Atlantic hurricane season started off faster than usual, with expectations for an above-average season through mid-August.
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