For Immediate Release:
AIR Worldwide Estimates Insured Losses in Bermuda from Hurricane Gonzalo To Range Between USD 200 Million and USD 400 Million
BOSTON, Oct. 22, 2014 - Catastrophe modeling firm AIR Worldwide estimates that insured losses in Bermuda from Hurricane Gonzalo will range between USD 200 million and USD 400 million. To produce loss estimates for Hurricane Gonzalo using the AIR Tropical Cyclone Model for the Caribbean, AIR used track and intensity information from NHC advisories, vortex reports from hurricane hunter aircraft, and actual wind observations from stations in Bermuda.
"On Friday October 17, at 8:30 PM Atlantic Standard Time, the very center of Gonzalo made landfall on the south-central coast of Bermuda. Gonzalo's very large, 30-mile radius eye engulfed Bermuda; webcams on the island recorded an eerie calm for about 90 minutes before strong winds, coming this time from the opposite (westerly) direction, moved in once again," said Scott Stransky, manager and principal scientist at AIR Worldwide. "When the eye began to come onshore, the storm was still a Category 3 hurricane with 115 mph sustained winds. However, by the time the center passed overhead, Gonzalo had weakened to a Category 2 hurricane, with 110 mph sustained winds."
Stransky continued, "The strongest observed winds at Bermuda International Airport were 93 mph sustained, with gusts of 113 mph. The storm weakened prior to landfall due to both lower sea surface temperatures and higher wind shear in the vicinity of Bermuda. Note that the center of Tropical Storm Fay passed directly over the island less than a week ago. It is likely that Fay's passage reduced the sea surface temperatures around Bermuda, allowing Gonzalo to be just slightly weaker than it might have been otherwise."
In 2003, Hurricane Fabian tracked just west of the island, with winds slightly higher than those from Gonzalo, causing losses of about USD 300 million (2003 USD values); AIR estimates that a recurrence of Fabian today-with today's exposures-would result in insured losses of around USD 650 million.
"After passing across Bermuda, Hurricane Gonzalo tracked in a northeasterly direction towards Newfoundland, Canada," noted Stransky. "The storm remained well offshore but produced tropical storm conditions in Newfoundland on Sunday, October 19, with high surf and heavy precipitation. On Tuesday, October 21, the hurricane's remnants battered northern Scotland. Torrential rain and gusts reaching 70 mph proved fatal as well as damaging by downing trees."
According to AIR, Bermuda's building codes, which are strictly enforced, provide building design criteria to withstand sustained wind speeds up to 110 mph and gusts up to 150 mph. Buildings are usually made of reinforced masonry or concrete, and tend to have smaller windows equipped with shutters. Older more traditional buildings are often made of limestone blocks. Light metal, which is highly vulnerable to wind damage, is used mostly for warehouses or repair shops and these may not meet code requirements.
Roofs are typically made of limestone tiles cemented together. Roofs made of other materials, such as wood or asphalt shingles, and occasionally foam roofing, showed heavier damage than more traditional roofs. Roof damage increases the likelihood of structural breaches, which can then lead to damage to interior walls and finishes, as well as contents.
According to AIR, most of the newer and well-maintained buildings that meet Bermuda's codes stood up well to Gonzalo's winds, with only minor damage to roof areas that were directly exposed to the oncoming storm. Gonzalo's track may have also mitigated the damage in Bermuda. Building damage from winds is due to both wind speed and duration. Thus, the damage caused by Gonzalo was not as bad as it potentially could have been because Gonzalo's eye (the calm of the storm) enveloped the entire territory as it passed directly overhead, thereby reducing the amount of time buildings were exposed to heavy winds.
Other damage mechanisms included damage due to flying debris. In addition, boats were torn from their moorings and subsequently left to drift freely, causing them to collide with other boats or run aground. Some boats that were housed onshore for repair or storage were blown onto their sides. High waves damaged piers and caused some coastal erosion.
AIR conducted a damage survey across Bermuda on October 19-20. In the areas surveyed, damage was mostly limited to roofs but structural damage was seen on older buildings, including some historical ones. Most resorts on the island withstood the storm very well, sustaining only minor roof damage to one or two units that were more directly exposed to high winds.
Some roof damage caused by Tropical Storm Fay a week earlier was still under repair when Hurricane Gonzalo struck. Roof damage ranged from superficial, with just a few tiles removed, to severe-although in most cases, the interiors were not breached.
Less common, but still seen in several areas, was heavier damage to older buildings or to buildings that were less well maintained or not subject to strict building codes (such as warehouses or garages).
AIR's industry insured loss estimates reflect:
- Insured physical damage to onshore property (residential, commercial, and industrial) and autos due to wind and precipitation-induced flooding in Bermuda
- Insured loss to contents
- AIR's assumed take-up rates-that is, the percentage of properties in Bermuda that are insured against wind and flood damage
- Losses due to business interruption
- Losses to industrial facilities
AIR's industry insured loss estimates do not include:
- Losses outside of Bermuda caused by Gonzalo
- Losses to infrastructure
- Losses to boats; losses may be estimated for boats inside of a building 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
- Other non-modeled losses
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 90 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, and agricultural risk management. AIR, 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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For more information, contact:
Kevin Long
AIR Worldwide
617-267-6645
klong@air-worldwide.com