Storm Hilary private insurance market loss could near $600m: KCC
The impacts of was was once hurricane Hilary in California and surrounding states is estimated as likely to drive a private insurance market loss of close to $600 million, according to Karen Clark & Company.
Using the catastrophe risk modelling specialists high-resolution KCC US Hurricane References Model, the firm estimates that the privately insured loss from Hurricane Hilary will be close to $600 million in the US.
KCC notes that this estimate includes privately insured damages to residential, commercial, and industrial properties, as well as automobiles, but does not include boats, offshore properties, or any losses that fall to the National Flood Insurance Program (NFIP).
KCC said that the primary impacts from storm Hilary were flooding rains across southern California, with August 20th becoming the wettest August day on record for both Los Angeles and San Diego, with 2.5 inches of rain in LA and 1.8 inches in San Diego.
Some desert areas received half a year to a years worth of rainfall in a day.
The result was flooding, mudslides and rockslides in California, while strong winds, with some recorded wind gusts upwards of 70 mph, downed trees and power lines and left tens of thousands of residents without power in California, KCC explained.
KCC also commented that, “It is very rare, but not unprecedented for a tropical storm to impact California — typically only the remnants of tropical storms impact the state. The most recent storm to maintain tropical storm strength as it impacted California was Hurricane Nora in 1997, which also made landfall in Baja California. The last tropical storm to make landfall in California was El Cordonazo in 1939. Hilary was the first tropical storm to trigger an NHC tropical storm warning for Southern California.”
Investment manager Twelve Capital had said that tropical storm Hilary could be another event that serves to further erode some of the retention layers sitting beneath catastrophe bonds that provide aggregate reinsurance protection. However, at the level of industry losses cited by KCC, any such erosion would be expected to be a minimal contributor.
