It never rains but it quakes15th September, 2017
With Harvey it seems clear that the category 4 hurricane which struck close to Corpus Christi and pretty much destroyed the little town of Rockport was not the main cause of economic or insured damage. Rather the tropical storm which followed the hurricane has generated the critical ingredients of that catastrophe. As you know we have picked up estimates of economic losses of between $75 and $100 billion with insured losses somewhere between $10 and $20 billion. It will take some while to arrive at consistent numbers.
Harvey has been almost immediately followed by Hurricane Irma. This category 5 hurricane has already produced significant losses in the West Indies although from a narrow point of view the cost to insurers is not likely to be hugely significant. It is the personal tragedy which deserves front of stage. Irma is slowly but surely heading towards mainland Florida with a path which could take it right through that State and up into Georgia and South Carolina. It has every sign of turning out to be the worst disaster which has been suffered in the USA since the San Francisco earthquake of 1904.
It seems impossible to ignore Irma if you turn on the television. The governors of various West Indian islands have been followed on the media by a mixture of Rick Scott, the Governor of Florida, and both Theresa May and Emmanuel Macron. The latter have promised aid to the West Indian territories under their control while Mr Scott has been preparing Florida for the worst, including substantial evacuation. These evacuations are also taking place in parts of Georgia.
Now to add a little spice to this already unpalatable mixture, Mexico has suffered an earthquake of 8.1 magnitude which has struck the southern coast leading to the inevitable tsunami. In the context of Irma probably this earthquake is of no major insured significance but yet another personal tragedy for residents. And, of course we have yet to see what might happen with Hurricanes Jose and Katia which are lurking in Irma’s wings.
It would be very strange if any one of us did not have uncomfortable feelings with concerns about the human consequences of these disasters combined with how much it may cost each one of us as Lloyd's Names. It would be wrong to give you undue comfort especially in the light of the indications from Lloyd's that realistic disaster scenarios (RDS) point to the insured costs of Irma as well in excess of $100 billion. What we must all realise is that at this stage there is little point in chasing our members’ agents, let alone individual underwriters, for estimates. No doubt initial numbers will be forthcoming by mid-October, after the major part of this year’s hurricane season has gone by.