AIR Worldwide Estimates Combined Insured Losses for Hurricane Matthew for the United States and the Caribbean Will Be Between USD 2.8 Billion and USD 8.8 Billion

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BOSTON, Oct. 13, 2016 (GLOBE NEWSWIRE) — Catastrophe modeling firm AIR Worldwide estimates that industry insured losses for the United States resulting from Hurricane Matthew range from USD 2.2 billion to USD 6.8 billion, and for the Caribbean estimated industry insured losses from Hurricane Matthew range from USD 600 million to USD 2.0 billion. Hurricane Matthew affected the Caribbean and the southeastern coastline of the U.S. for nearly two weeks. AIR Worldwide is a Verisk Analytics (Nasdaq:VRSK) business.

On September 28, Matthew passed through the Windward Islands and Barbados as a tropical storm; by the afternoon of September 29, Matthew had become the 2016 Atlantic hurricane season’s fifth hurricane. Matthew quickly intensified to become a major hurricane and by October 1 the storm reached its peak intensity, as a Category 5 hurricane with 160 mph winds. On October 4, Matthew clipped western Haiti and eastern Cuba as a Category 4 storm and then proceeded through the Windward Passage to the Bahamas, which it hammered as a Category 4 and Category 3 storm.

Matthew continued to weaken as it made its way along eastern coast of Florida and then along the coasts of Georgia and South Carolina. The storm weakened more quickly than anticipated to minimal Category 1 strength, and when Matthew made landfall in McClellanville, South Carolina, 40 miles northeast of Charleston on the morning of October 8, it had winds of 75 miles per hour and a central pressure of 967 mb. By this time, Matthew was rapidly losing tropical characteristics, and strong vertical shear caused continued weakening, although impacts continued to be felt, particularly by storm surge and heavy inland flooding.

Matthew impacted five U.S. states-Florida, Georgia, South Carolina, North Carolina, and Virginia-with power outages affecting millions of homes and businesses. In some locations, Matthew’s winds were upwards of 100 mph, storm surge reached 9 feet, and as much as 17 inches of rain was reported. Throughout the region more than 3 million people were evacuated.

In Florida, the winds outside the eyewall were strong enough to down trees, powerlines, and signs; strip off awnings, siding, and other non-structural building features; erode beaches and wash away boats and automobiles; and peel the roofs from many homes and businesses, from Port St. Lucie to Jacksonville. The closest the center of the storm came to onshore properties in Florida was 25 miles east of Cape Canaveral, where NASA’s rocket launch facility experienced damage to roofs, windows, and siding, as well as some water intrusion.

In Georgia, Matthew tracked further offshore, but that did not prevent a dome of water from being pushed into river inlets and low-lying areas near Savannah. More than a foot of rain fell in some locations, leaving roads, homes and businesses inundated. Wind damage in Savannah was primarily exhibited by downed trees, especially in residential neighborhoods. Storm surge near Tybee Island reached record levels of near 15 feet, and many nearby coastal islands also experienced significant surge.

In South Carolina, several rivers reached moderate or major flood levels. Hilton Head Island experienced surge damage and damage to marinas. Much of downtown Charleston was flooded, including several communities, such as Harleston Village and South of Broad, near the river. Many businesses were also affected, and several feet of water inundated Market Street and the Historic Charleston City Market area in the eastern part of the city, as well as Calhoun Street in the western part of the city, making many of the businesses and hospitals in the area inaccessible. Beachfront communities along the South Carolina coast, including Myrtle Beach, exhibited significant storm surge and beach erosion, and from satellite images a number of beachfront properties showed signs of missing roof cover.

In North Carolina several rivers have reached record levels. Virginia experienced 10 inches of rain in some areas.

AIR’s modeled insured loss estimates for the United States include:

  • Insured physical damage to property (residential, commercial, industrial, auto), both structures and their contents
  • Additional living expenses (ALE) for residential claims
  • For residential lines, 5% of modeled storm surge damage as wind losses
  • For commercial lines, insured physical damage to structures and contents, and business interruption directly caused by storm surge (Other flood losses are not modeled or reflected in estimates.)
  • For business interruption, direct and indirect losses for insured risks that experience physical loss
  • For the automobile line, 100% of storm surge damage
  • 2016 Indexed Take-Up Rates
  • Demand surge

AIR’s modeled insured loss estimates for the United States do not include:

  • Losses paid out by the National Flood Insurance Program
  • Losses resulting from the compromise of existing defenses (e.g., natural and man-made levees)
  • Losses from the flooding of tunnels and subways
  • Losses to uninsured properties
  • Losses to infrastructure
  • Losses from extra-contractual obligations
  • Losses from hazardous waste cleanup, vandalism, or civil commotion, whether directly or indirectly caused by the event
  • Other non-modeled losses
  • Losses for U.S. offshore assets and non-U.S. property (AIR estimates these losses separately.)

AIR’s modeled insured loss estimates for the Caribbean include:

  • Insured physical damage to onshore property (residential, commercial, and industrial) and auos due to wind and precipitation-induced flooding
  • Insured loss to contents
  • 2016 Indexed Take-Up Rates
  • Losses due to business interruption
  • Losses to industrial facilities
  • Additional living expenses (ALE) for residential claims
  • For residential lines in the U.S. territories of Puerto Rico and the U.S. Virgin Islands, 10% of modeled precipitation induced flooding damage under wind policies
  • For residential lines in territories other than in the U.S. territories of Puerto Rico and the U.S. Virgin Islands, 100% of flood losses
  • For commercial lines in the U.S. territories of Puerto Rico and the U.S. Virgin Islands, insured physical damage to structures and contents and business interruption directly caused by precipitation-induced flooding, assuming a 10% take-up rate for commercial flood policies
  • For commercial lines in territories other than in the U.S. territories of Puerto Rico and the U.S. Virgin Islands, 100% of flood losses
  • For business interruption losses, direct and indirect losses for insured risks that experience physical loss
  • For storm surge, loss is implicitly accounted for in the wind damage functions

AIR’s modeled insured loss estimates for the Caribbean do not include:

  • Losses to infrastructure
  • Losses to boats (Losses for boats inside a building may be estimated if their replacement value is included as contents.)
  • Losses from hazardous waste cleanup, vandalism, or civil commotion whether directly or indirectly caused by the event
  • Demand surge (Users may choose to turn on demand surge or input a demand surge function of their own.)
  • Other non-modeled losses
  • Loss to offshore properties, pleasure boats, and marine craft
  • Losses resulting from the compromise of existing defenses (e.g., levees)
  • Losses to uninsured properties
  • Other non-modeled losses, including loss adjustment expenses

About AIR Worldwide
AIR Worldwide (AIR) provides catastrophe risk modeling solutions that make individuals, businesses, and society more resilient. AIR founded the catastrophe modeling industry in 1987, and today models the risk from natural catastrophes, terrorism, and pandemics globally. Insurance, reinsurance, financial, corporate, and government clients rely on AIR’s advanced science, software, and consulting services for catastrophe risk management, insurance-linked securities, site-specific engineering analyses, and agricultural risk management. AIR Worldwide, a Verisk Analytics (Nasdaq:VRSK) business, is headquartered in Boston with additional offices in North America, Europe, and Asia. For more information, please visit www.air-worldwide.com.

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Media Contact:
Kevin Long
AIR Worldwide
klong@air-worldwide.com
617-267-6645

Source: http://globenewswire.com/news-release/2016/10/13/879094/10165587/en/AIR-Worldwide-Estimates-Combined-Insured-Losses-for-Hurricane-Matthew-for-the-United-States-and-the-Caribbean-Will-Be-Between-USD-2-8-Billion-and-USD-8-8-Billion.html?f=22&fvtc=2&fvtv=1

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