Hurricane Hanna - the first US landfall hurricane of 2020
On July 25, Hurricane Hanna became the first hurricane of the 2020 Atlantic windstorm season to make landfall in the USA. Hanna was a modest storm, category one on scale that runs from one to five, and had maximum sustained winds of 90 mph as it crossed over Padre Island. By comparison, category five storms bring sustained gusts of 160 mph.
Hanna brought heavy rain and tidal surges to parts of coastal Southern Texas including the towns of Corpus Christi and Port Mansfield. 200,000 homes were reported to be without power and there was low to moderate wind damage to properties throughout the Rio Grande valley. Karen Clark & Company, a catastrophe modelling business, has estimated insured damage in the region of $350 million. Although this will be significant for homeowners and businesses in the area, it is not a substantial event for the insurance industry, where lower layers of reinsurance begin to become engaged when total insured damage reaches around $10 billion with stretches of cover equivalent to market losses in excess of $100 billion for some reinsurance buyers.
Although Hurricane Hanna will not live long in the memory of the reinsurance industry, it is the first hurricane of what is to be one of the most keenly watched season for many years. The hurricane season is normally considered to run from 1 June until 30 November each year, although the most damaging storms typically occur in August and September. This year’s storm season is closely watched largely because of the ongoing coronavirus pandemic. Many insurers have already exhausted part of their annual catastrophe budgets on Covid-19 claims, while the continuing spread of the virus in parts of the US threatens to inflate the costs of any storm that does make landfall. The insurance market is already at is hardest for almost twenty years. While the reinsurance market has lagged behind, recent renewals suggest a rapid hardening even before any impact of the 2020 storm season.
A useful resource in monitoring the progress of the storm season is Tropical Storm Risk here