Hurricane Isaac Pounds Louisiana; Est. Insured Losses up to $1.5 Billion

29-Aug-12

Hurricane Isaac made landfall in southeastern Louisiana Tuesday evening, August 28, 2012 as a Category 1 hurricane with maximum sustained winds of 80 mph. Hurricane force winds (sustained winds over 74 mph) do not appear to have extended to downtown New Orleans, however, tropical storm force winds were observed within New Orleans. Storm surge heights of between 6 to 12 feet have been observed along the Southeastern Louisiana and Mississippi coast and in combination with waves, coastal portions of the area have generated localized coastal flooding. A floodwall was overtopped in Plaquemines Parish, south of New Orleans, but the fortified areas of New Orleans have withstood the event so far. Hurricane Isaac is a slow-moving storm with projected accumulations of up to 17 inches of rain over the next few days.

Many smaller rivers to the east of the Mississippi River are currently at flood stage or are projected to crest at or above minor to moderate flooding levels. The Mississippi River is expected to remain below flood stage. Rising water elevations are expected to flood houses and other buildings later this week and into the weekend. Using EQECAT's Insured Exposure Data (IED) and EQECAT's North Atlantic Hurricane Model, the insured loss estimate for onshore property (personal, commercial, and industrial, including time element) is expected to be between $500 million to $1.5 billion. Economic losses to offshore energy assets (platforms, pipelines, and shut-in production) are expected to range from $500 million to $1 billion from this event (reliable insured exposure information is not available).

The center of Isaac first touched the tip of the Mississippi River delta around 6:45 pm CDT before slowly drifting west back over water. At 2:15 am CDT, the center came ashore just west of Port Fourchon on Louisiana's southeast coast.

Several hours before the center reached the coast, strong rainbands and the leading edge of the eyewall brought high gusts and heavy rains along the Mississippi coast and into southeastern Louisiana. Peak gusts, in mph, were reported in the range of 50's to 70's throughout the general landfall region and along the Mississippi coast.

There have been numerous reports of high storm tides and surge flooding throughout the landfall area. Most notable surge levels reported were Shell Beach, LA at 11 ft, Bay Waveland Yacht Club, MS at 10 ft, Pascagoula NOAA Lab, MS at 6 ft, and a Mobile, AL Coast Guard station at 6 feet. The new walls built by the Army Corps of Engineers held the biggest surge and appear to have remained intact.

Tide Data for Shell Beach, LA - August 29, 2012

Tide Data for Shell Beach, LA - August 29, 2012
Source: NOAA Tides and Currents

Storm surge of about 12 inches was reported in Plaquemines Parish last night which caused the over-topping of an 18 mile stretch of back levee in the Parish. This levee was maintained by the parish and is not part of the Hurricane and Storm Damage Risk Reduction System in New Orleans, LA.

Smaller rivers to the east of the Mississippi River are currently at flood stage or are projected to crest at or above minor to moderate flooding levels, including the Tchefuncte River, Bogue Falaya River, Pearl River, East Hobolochito Creek, Jourdan River, Wolf River, Biloxi River, Tchoutacabouffa River and Tangipahoa River. In many of these areas, rising water elevations are expected to flood houses and other buildings later this week and into the weekend.

Surface Wind Field for Hurricane Isaac - August 29, 2012

Surface Wind Field for Hurricane Isaac - August 29, 2012
Source: National Hurricane Center (NHC)

At 10 am CDT, Wednesday, August 29, the center of Isaac was located over Houma, Louisiana, at latitude 29.6N, longitude 90.7W, and around 45 miles southwest of New Orleans. Maximum sustained winds were at 75 mph, and weakening has been slow with much of Isaacs circulation remaining offshore or over flat bayou terrain. Isaac is forecast to slowly move to the northwest at around 6 mph today. Weakening is expected as the center progresses deeper inland, and Isaac should be downgraded to a tropical storm later today. Isaac is expected to turn to the north-northwest Thursday night or early Friday, and move into southern Arkansas on Friday.

A hurricane warning remains in effect from east of Morgan City, Louisiana, east to the Mississippi-Alabama border.

Total rainfall amounts of 7 to 14 inches, with possible isolated maximum amounts to 20 inches were expected over much of Louisiana, southern Mississippi, and southwestern Alabama through Friday. Isolated tornadoes remain possible along the central Gulf Coast region and parts of the lower Mississippi River Valley through Thursday.

Although Hurricane Isaac's landfall date and location coincides with that of Hurricane Katrina (2005), Isaac is a much weaker storm compared to Katrina. Hurricane Gustav (2008) and Hurricane Florence (1988) are useful historic benchmarks for Isaac, both with similar tracks but different wind intensities. Gustav was a Category 2 storm at landfall while Florence was a Category 1. The insured loss from Gustav (estimated if it were to occur in 2012) is about $2.5 billion, and the losses from Florence would be less than $500 Million. Gustav was a much stronger storm. Hurricane Florence was weaker than Isaac.

Combining EQECAT's IED and proxy event IDs for Isaac with EQECAT's North Atlantic Hurricane Model produces an insured loss estimate for onshore property ranging between $500 million to $1.5 billion from this event. EQECAT's IED represents estimates of total insured values derived from representative market exposure data, census demographics, macro economic data, building square footage data, and representative policy terms and conditions. EQECAT's insured loss estimates do not include expected recoveries from the National Flood Insurance Program (NFIP).

EQECAT's IED for offshore energy represents valuations and vulnerability characteristics of fixed, floating and underwater assets in the Federal waters of the Gulf of Mexico. The insurance coverage of this industry is dynamic and EQECAT cannot reliably estimate what portion of the ground-up damage to these assets is ultimately insured by private insurers. EQECAT estimates that ground-up damages will range from $500 million to $1 billion from this event.

Florence, Gustav and Isaac - August 29, 2012

Florence, Gustav and Isaac - August 29, 2012
Source: EQECAT

Users of EQECAT's North Atlantic Hurricane Model are advised to use the following event IDs to ascertain the impacts on their portfolio from this event:

For Onshore losses: 13637, 13866, 13878, 13879, 14340, and 14557

For Offshore losses: 49645, 66960, 74544, 79094, 87755, 87813, 102473, 114788, and 117671

Hurricane Isaac at Landfall - August 29, 2012

Hurricane Isaac at Landfall - August 29, 2012
Source: EQECAT

Hurricane Isaac in the Gulf of Mexico - August 29, 2012

Hurricane Isaac in the Gulf of Mexico - August 29, 2012
Source: EQECAT

EQECAT will continue to monitor this event and provide updates as more information becomes available.

Engineering Risk and Site Evaluations

EQECAT Inc. and ABS Consulting are part of the ABS Group of Companies. ABS Consulting offers on-site risk assessments, evaluations and structural engineering services with more than 1,800 employees worldwide. ABS Consulting engineers and scientists use EQECAT catastrophe risk models to provide risk assessments, in addition to having performed inspections or repairs after more than 100 earthquakes and 25 major windstorms. Learn more about ABS Consulting's natural hazard risk assessment capabilities.

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