Magazine article Risk Management

Hurricane Matthew's Destructive Path

Magazine article Risk Management

Hurricane Matthew's Destructive Path

Article excerpt

As a Category 4 storm on Oct. 4, Hurricane Matthew decimated Haiti, causing more than 1,000 deaths before moving on to the southeast coast of the United States. There, downgraded to a Category 1, it hit sections of Florida with hurricane-force winds of more than 74 mph, damaging roofs, windows, awnings and signage of residential and commercial buildings. Moving north as a Category 1, it grazed Georgia and South Carolina, then made landfall north of Charleston, South Carolina, lingering in North Carolina. More than 43 deaths were reported along the East Coast, including 27 in North Carolina, and thousands of residents were displaced, some for weeks. Many of those who could make it home found that they had no electricity or water. In one county alone, 20,000 people were without power.

Despite extensive damage, however, the hurricane's impact in the United States was much less than originally anticipated, especially considering that at one point the storm reached Category 5 intensity. "The estimates started in the early phases at $25 billion in damages," said Hart S. Brown, vice president of organizational resilience for HUB International's Risk Services division. "Thar has come down, based on the path it took, to an estimate of $10 billion in total losses. Insured damages have come to $1.5 billion at the low end and $5 billion to $6 billion on the high end." Modeling firm Karen Clark & Co. estimates insurers will pay around $7 billion for damages in the United States.

The storm is not expected to impact the property and casualty insurance market for buyers. "If those estimates would have been at $25 billion--if it had seen a landfall and significant damage--we might have seen some hardening of the market," Brown said.

Claims have poured in. In Florida, for example, just two weeks after Hurricane Matthew there were more than 91,000 claims with estimated losses of $550 million, according to Amy Bogner, communications director for the Florida Office of Insurance Regulation. She added that close to 80,000 of those claims were for residential property, more than 3,000 for commercial property and about 4,000 for flood damage.

In South Carolina, Matthew dumped significant amounts of rain along the coast. More than two weeks later, some 60 state roads and bridges remained closed in two counties and at least 10 dams that had previously been examined for safety by state inspectors had either broken or sustained major damage, according to The State. …

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