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If Hurricane Ivan Hits U.S., 2004 Would Be a '1 in 50 Year' Series of Storm Events for Insurance Industry, EQECAT Says
Insured Losses Of Current Storm Could Be "Huge," But Path, Intensity Could Change Dramatically, EQECAT Says
OAKLAND, Calif.--(BUSINESS WIRE)--Sept. 9, 2004-- A Florida landfall by Hurricane Ivan, currently fluctuating between a category four and category five storm, coupled with Hurricanes Charley and Frances, would create a confluence of events that statistically only has a 2 percent chance of occurring in any year in the United States, said Thomas Larsen, senior vice president of EQECAT Inc., the leading authority on extreme risk modeling.
A similar series of events have happened several times early in the last century: 1926, 1933 and 1935. Computerized models created by EQECAT take into account such a series of events and enable insurance companies to incorporate those eventualities into their plans, said Rick Clinton, president of EQECAT.
Multiple Hurricanes Struck Early In Last Century
In 1926, three hurricanes struck Florida, including a category four storm, which ripped through what is now Miami-Dade county, and in 1933, another three storms struck Florida.
Two years later, the 1935 "Labor Day" storm hit the Florida Keys and the southern Gulf Coast of Florida. It was one of only three storms since 1900 designated a category five hurricane, to strike the U.S. Gulf and Atlantic Coast, EQECAT said.
In 1964, three hurricanes struck Florida, but they were category two storms.
The last category five hurricane to strike the U.S. was Hurricane Andrew in 1992. When it struck in 1992, it caused $15.5 billion of insured losses. It is estimated insured losses would be $24 billion if a storm like Hurricane Andrew were to occur now. Losses due to Andrew could have been much higher had it hit the more densely populated areas of the Miami metropolitan region.
The potential insured losses resulting from storms of the sizes which struck early in the last century would be even greater than Andrew since the population of Florida in the 1920s and 1930s was only a small fraction of the current population.
EQECAT Computerized Re-Creations Of Early Storms Show Huge Potential Losses
Based upon available National Hurricane Center storm intensity data, if the storms from the earlier part of the last century were to occur today, the potential losses could be huge, EQECAT said.
A computerized re-creation of the 1935 Labor Day storm could cause insured losses exceeding $60 billion.
The EQECAT re-creation of the 1926 storm that struck Miami could result in losses exceeding $50 billion.
EQECAT estimates the insured losses for a strike near the Tampa/ St. Petersburg metro area could exceed $35 billion if Ivan continues along its expected path and remains a category four or five storm - both of which are very uncertain this far away from possible landfall. Taken together, the sum of losses from Hurricanes Charley, Frances and Ivan would push the 2004 hurricane insured losses to more than $45 billion for the season beginning in June, making this a one in 50 year loss.
Hurricanes Often Make Unexpected Changes In Direction, Strength
But, EQECAT cautioned, hurricanes often make sudden path changes and both weaken and strengthen unexpectedly.
With at least four days before possible landfall in Florida, many aspects of the storm could change significantly, EQECAT emphasized.
Hurricane activity for the first half of the 20th century was much stronger than the second half and some researchers believe we now may be entering another more active cycle, EQECAT said.
Hurricane Model is Part of WORLDCATenterprise(TM)
The EQECAT U.S. Hurricane model, which is part of WORLDCATenterprise(TM), was recently re-certified by the Florida Commission on Hurricane Loss Projection Methodology for use in Florida. Primary insurers, reinsurers, intermediaries, and other financial institutions use the model to develop strategies for pricing, portfolio management, and risk transfer.
EQECAT Serves Global Insurance, Business, Financial Services
EQECAT, an affiliate of ABSG Consulting Inc., serves the global property and casualty insurance industry, major multinational corporations and financial institutions. EQECAT is known as the technical leader and innovator in the development of analysis tools and methodologies to quantify insurers and major corporations exposure to natural and manmade catastrophic risk.
It is a recognized industry thought-leader providing the expertise and real-world tested tools to turn risk-theory into innovative actions and solutions to effectively manage extreme-risk worldwide. EQECAT's flagship product, WORLDCATenterprise is a multi-user platform for evaluating insured risks for many natural catastrophe perils in 88 countries.
EQECAT was founded in 1994 and is headquartered in Oakland, California. ABSG Consulting Inc., headquartered in Houston, Texas, has risk-management revenues of more than $140 million, and more than 1,000 employees worldwide.
Marc
Insured Losses Of Current Storm Could Be "Huge," But Path, Intensity Could Change Dramatically, EQECAT Says
OAKLAND, Calif.--(BUSINESS WIRE)--Sept. 9, 2004-- A Florida landfall by Hurricane Ivan, currently fluctuating between a category four and category five storm, coupled with Hurricanes Charley and Frances, would create a confluence of events that statistically only has a 2 percent chance of occurring in any year in the United States, said Thomas Larsen, senior vice president of EQECAT Inc., the leading authority on extreme risk modeling.
A similar series of events have happened several times early in the last century: 1926, 1933 and 1935. Computerized models created by EQECAT take into account such a series of events and enable insurance companies to incorporate those eventualities into their plans, said Rick Clinton, president of EQECAT.
Multiple Hurricanes Struck Early In Last Century
In 1926, three hurricanes struck Florida, including a category four storm, which ripped through what is now Miami-Dade county, and in 1933, another three storms struck Florida.
Two years later, the 1935 "Labor Day" storm hit the Florida Keys and the southern Gulf Coast of Florida. It was one of only three storms since 1900 designated a category five hurricane, to strike the U.S. Gulf and Atlantic Coast, EQECAT said.
In 1964, three hurricanes struck Florida, but they were category two storms.
The last category five hurricane to strike the U.S. was Hurricane Andrew in 1992. When it struck in 1992, it caused $15.5 billion of insured losses. It is estimated insured losses would be $24 billion if a storm like Hurricane Andrew were to occur now. Losses due to Andrew could have been much higher had it hit the more densely populated areas of the Miami metropolitan region.
The potential insured losses resulting from storms of the sizes which struck early in the last century would be even greater than Andrew since the population of Florida in the 1920s and 1930s was only a small fraction of the current population.
EQECAT Computerized Re-Creations Of Early Storms Show Huge Potential Losses
Based upon available National Hurricane Center storm intensity data, if the storms from the earlier part of the last century were to occur today, the potential losses could be huge, EQECAT said.
A computerized re-creation of the 1935 Labor Day storm could cause insured losses exceeding $60 billion.
The EQECAT re-creation of the 1926 storm that struck Miami could result in losses exceeding $50 billion.
EQECAT estimates the insured losses for a strike near the Tampa/ St. Petersburg metro area could exceed $35 billion if Ivan continues along its expected path and remains a category four or five storm - both of which are very uncertain this far away from possible landfall. Taken together, the sum of losses from Hurricanes Charley, Frances and Ivan would push the 2004 hurricane insured losses to more than $45 billion for the season beginning in June, making this a one in 50 year loss.
Hurricanes Often Make Unexpected Changes In Direction, Strength
But, EQECAT cautioned, hurricanes often make sudden path changes and both weaken and strengthen unexpectedly.
With at least four days before possible landfall in Florida, many aspects of the storm could change significantly, EQECAT emphasized.
Hurricane activity for the first half of the 20th century was much stronger than the second half and some researchers believe we now may be entering another more active cycle, EQECAT said.
Hurricane Model is Part of WORLDCATenterprise(TM)
The EQECAT U.S. Hurricane model, which is part of WORLDCATenterprise(TM), was recently re-certified by the Florida Commission on Hurricane Loss Projection Methodology for use in Florida. Primary insurers, reinsurers, intermediaries, and other financial institutions use the model to develop strategies for pricing, portfolio management, and risk transfer.
EQECAT Serves Global Insurance, Business, Financial Services
EQECAT, an affiliate of ABSG Consulting Inc., serves the global property and casualty insurance industry, major multinational corporations and financial institutions. EQECAT is known as the technical leader and innovator in the development of analysis tools and methodologies to quantify insurers and major corporations exposure to natural and manmade catastrophic risk.
It is a recognized industry thought-leader providing the expertise and real-world tested tools to turn risk-theory into innovative actions and solutions to effectively manage extreme-risk worldwide. EQECAT's flagship product, WORLDCATenterprise is a multi-user platform for evaluating insured risks for many natural catastrophe perils in 88 countries.
EQECAT was founded in 1994 and is headquartered in Oakland, California. ABSG Consulting Inc., headquartered in Houston, Texas, has risk-management revenues of more than $140 million, and more than 1,000 employees worldwide.
Marc
