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Decade In Review

Ending a calendar year provides a great opportunity to officially close the book on a specific period of time and review what has happened. We’ve grown accustomed to seeing annual reviews of the things that have shaped a year as it closes, but we get the opportunity to reflect on an entire decade much less frequently. There are all sorts of reviews appearing that highlight the last decade, and it’s amazing how fast one can forget key events that have happened. Indeed, when I present on weather trends in the insurance industry, I often suggest that our weather memory is generational, and we really only remember the last impactful event. In reality, however, our weather memory is likely even shorter than that. Therefore, I want to take this opportunity to review what I think are the biggest events that have shaped the catastrophe analytics industry over the last decade. Clearly, this is relative, as there is an almost endless list of events that could be labeled as local industry-changing. From my point of view, though, there are just a handful of key events that will have lasting effects into the next decade for the insurance/reinsurance catastrophe analytics industry. Before I highlight my top event, let’s look at some of the other contenders.

The decade began very actively with major earthquake events around the world. Just under two weeks into the new decade, a 7.0-magnitude earthquake struck Haiti on January 12, 2010 and quickly became a humanitarian disaster with a death toll reaching over 230,000. Just 46 days later, an 8.8-magnitude earthquake hit Chile on February 27. A few months later and halfway around the world, a 7.1-magnitude earthquake struck near Darfield in the Canterbury region of New Zealand on September 4 and was followed by a series of large aftershocks that changed nearby Christchurch forever. A few months later on March 11, 2011, nearly 16,000 people lost their lives from the Tohoku 9.1 earthquake and resultant deadly tsunami, which still gives me chills when I remember watching the live videos unfold that day on TV. There have been many other large earthquakes as well, such as Napa, CA (2014), Nepal (2015), and Italy (2016), all of which had a large influence on the insurance industry. These earthquakes also impacted catastrophe model updates, not only regionally, but also across the globe, as they provided excellent learning opportunities and new information related to engineering, aftershocks, liquefaction and multi-fault raptures. Catastrophe modeling companies have been able to use lessons from these events to update key components in U.S. earthquake models, despite not having a lot of resources dedicated to researching earthquakes in the U.S.

Severe Weather
The decade also kicked off with another string of events that seemed to come out of nowhere and can change the catastrophe analytics industry in the blink of an eye. The U.S. severe weather season was active in early 2011 with two key events: 1) the EF4 tornado that struck Tuscaloosa and Birmingham, Alabama on April 27, and 2) the EF5 tornado that struck Joplin, Missouri on May 22. That 2011 severe weather season still stands out in terms of the insured loss and the number of severe weather observations. These events were likely the final straw for the various catastrophe modeling companies, as they soon upgraded their older severe thunderstorm models with pretty drastic changes. In fact, prior to 2011, many insurance companies largely disregarded the catastrophe modeling output. However, with the newer models we currently have, the output is actually being utilized by insurance companies in many different facets of their business. The 2011 tornadoes also illustrated the importance of understanding the increased risks associated with the growth that is occurring in many urban areas around the world. These events are useful in deterministic event analysis to see what might happen if a Joplin-type event hit an area of high exposure concentration.

Non-Hurricane Landfalls
In the early part of the decade, another large event occurred that had far-reaching effects. After threatening much of the U.S. East Coast, Superstorm Sandy eventually made landfall along the New Jersey coastline on October 29, 2012. With over 60 million people affected, this storm taught many lessons to inhabitants in an area of the coastline that has had relatively few large named storms make landfall in the past. You may remember that this storm prompted many discussions around whether it was, in fact, a hurricane. How that uncertainty influenced hurricane deductibles was very interesting. It highlighted issues with coastal storm surge and rainfall in highly developed areas, prolonged business interruption, and how contents and components of critical infrastructure, such as servers and electrical systems, are modeled.

In reviewing the last decade, the devastating wildfires that occurred, starting with the Fort McMurry, Alberta, Canada wildfire on May 3, 2016, warrant mention. Soon thereafter, we saw a rare southeast wildfire hit Gatlinburg, TN in November of 2016. These events were the precursor to several major wildfires that impacted California and brought much-needed change to outdated catastrophe models to address this costly new peril. We also saw new burdens placed on policyholders as a result of these events, such as non-renewal notices and state mandates. As rolling power outages became more common, they brought new attention to business interruption insurance. The wildfire risk continues to grow around the world, and the lessons we’ve learned thus far are changing how this risk will be viewed in the future, with much more focus on defensible space and overall accumulation of risk in any one given wildfire zone or Wildland Urban Interface (WUI).

New Risks
An interesting aspect of looking at catastrophic losses over a decade is that new trends can be observed. When thinking back to 2010, many in the insurance industry thought the word “cyber” was about computer networks or virtual reality. In just a decade, however, a new industry has been born, which will likely continue to grow in the future. We are just at the forefront of new product offerings and understanding the risk associated with cyber loss, with new cyber models now becoming another tool catastrophe analytics can incorporate into their daily management of risk.

Lastly, a review of the decade would not be complete without thinking about the countless major flooding events that have impacted the world over the last decade, many of which were labeled 1,000 year flood/rainfall events. This is likely the hardest list to narrow down, but I think two events are the most prominent. The 2011 Southeast Asian floods stand out as major industry events because they were a classic known/unknown risk with many new factories being built on known flood plains, but no catastrophic hazard models to understand such risk. The losses were compounded with contingent business interruption losses after the Japan Earthquake forced suppliers to relocate from Japan to Southeast Asia. Clearly, these circumstances provided far-reaching opportunities to better understand worldwide flood risk. Hurricane Harvey’s (2017) wind-related losses pale in comparison to its flood-related losses. As flood is typically not a covered peril in private homeowner’s policies, the large majority of Harvey’s impacts were uninsured, illustrating that there is a large protection gap even in the U.S. Commercial and automobile flood losses still made Harvey a major event for certain segments of the market, however. The flooding likely also put stress on the catastrophe analytics industry to invest more time and resources into understanding the peril. However, Hurricane Harvey had an even greater influence, which brings me to the most impactful event to the catastrophe analytics industry over the last decade.

The Top Event
For much of the last decade, the continuation of the U.S. major landfalling hurricane drought and the quick revision to the mean with HIM FM landfalls (Harvey, Irma, Maria in 2017 and Florence and Michael in 2018) was unprecedented and had far-reaching effects across the global insurance industry. HIM FM provided valuable new data sets for the catastrophe risk models, yet also had individual influences on the catastrophe analytics industry. In the 170 years of landfall records, never had there been an extended period lasting this long without a major hurricane landfall. Twenty-seven major hurricanes occurred in the Atlantic Ocean basin since the last major hurricane, Wilma, struck Florida in 2005. The odds of this are 1 in 2,300, according to Phil Klotzbach at Colorado State University.

However, compared to the earthquakes, this return period is nothing, so why is this the top event for the decade one might ask? There are too many factors to discuss in this short BMS Insight, but, when you think about the startling lack of hurricanes after the 2004 and 2005 hurricane seasons when catastrophe modeling companies and the insurance industry were trying to gain a better understanding of the frequency and severity of these storms, the impacts were far-reaching. As a result of the major landfall activity after the 2004 and 2005 hurricane season, some in the insurance industry took drastic steps, and catastrophe modeling companies implemented rate changes that would cost the industry billions of dollars in increased reinsurance spending over the following years that experienced no landfalls. In the first part of the decade, however, without any major U.S. landfalling hurricanes and global capital realizing that catastrophe risk is not correlated with the global economic cycle, capital flooded into the catastrophe markets and resulted in falling reinsurance prices. At the same time, the population of coastal areas exposed to hurricanes continued to increase, and complacency set in among the insurance industry and the general public, limiting disaster resiliency.

So, 10 years ago, the insurance industry was coming out of a decade of an unprecedented series of hurricane strikes and reeling from high insurance and reinsurance rates. No one at the time could predict that the industry would be granted an unprecedented, decade-long reprieve by Mother Nature, while simultaneously enjoying the most favorable global reinsurance and catastrophe market in memory. When HIM FM finally broke the long-standing hurricane drought, it taught many new lessons to the insurance industry that will last well into the next decade. This, to me, is why the continuation and end of the hurricane drought was the most important event to the catastrophe modeling industry in the last decade.

The 2020’s
Taking the opportunity to look back at the last decade clearly shows there are cases where history can repeat itself. There are a great number of known unknown events that can impact the insurance industry. There are many current questions that could be addressed in the decade to come, like what will happen with climate change and how will the catastrophe models account for the near term and long terms trends that could start to emerge over the next decade. Maybe there will be rare perils that impact the insurance industry such as geomagnetic storms or maybe a major volcanic eruption near a large population center. Neither of these perils has a standard catastrophe model, but they are often covered insurance risks. One thing is certain there will be surprises over the next decade. The catastrophe analytics industry will continue to quantify the risks using new technologies which will help reduce uncertainty and maybe even create new markets, ultimately closing the protection gap around the world.

2019 Atlantic Hurricane Summary

Was the 2019 Hurricane Season Active or Not?
The six-month 2019 North American hurricane season is officially in the books and it was an active one in terms of named storm counts, with the majority of activity coming in the typical mid-August and mid-October periods. The season ended with 18 named storms, six of which became hurricanes, and three of those achieving major hurricane status (Category 3+ on the Saffir-Simpson scale). Having 18 named storms in a season is well above the 12.1 average (1981 – 2010), but the number of hurricanes and major hurricanes are right around what would be expected in an average year. In terms of ACE (Accumulated Cyclone Energy), the season ended up at 123% of the average, with two storms, Dorian and Lorenzo, contributing an impressive 61% to the tally.

Preliminary Atlantic Tropical System Track Map Source: NHC:
Key parameters that track the overall activity during a hurricane season. Source: NHC and Colorado State University

What is, perhaps, even more interesting is that, of the 18 named storms, eight of them lasted two days or less and some didn’t even last 24 hours. Two storms (Olga and Imelda) ended up being named storms for only six hours. The number of named storm days totaled 68.5, which is 115% of the expected 59.5 average (1981 – 2010). This year clearly showed the bias to satellite observations, as several of the named storms this year likely would not have been named in the pre-satellite era.

Even these short named storms can be destructive to the insurance industry, such as Imelda, which impacted parts of eastern Texas with 43 inches of rainfall. This highlights that the category is not always indicative of how destructive a hurricane might be. In fact, the named tropical storms of Imelda, Nestor, and Olga accounted for 42% of the total U.S. insurance industry loss this season, which should likely ultimately settle for under $2 billion. However, it should be noted that the named storm average annual loss for the U.S. is over $15 billion annually, so the U.S. insurance industry was lucky this year, especially considering Dorian.

The season will clearly be remembered for major hurricane Dorian, which stalled over the northern Bahamas as a Category 5 hurricane for nearly two days and gave south Florida a good scare when the monster storm refused to leave the area. The insured loss impacts to the Bahamas are expected to surpass $3.5 billion (USD). Despite the strongest winds remaining off the coast of the U.S., impacts were still felt in Florida, Georgia, South Carolina and North Carolina (but not Alabama). This will be the largest insured loss event for the U.S. this season at over $500 million.

We also can’t forget about Dorian’s impact to eastern Canada, which is expected to hit around $2 billion (CAD) of loss and had a wide-ranging impact. This is a good reminder that strong named storms can easily impact New England during a hurricane season. With saturated ground and trees being in full leaf, many large trees were uprooted across eastern Canada, leading to long-term power outages, a major source of loss after strong wind events. Around 80% of the homes and businesses lost power in Nova Scotia at one point which is a reminder that the insurance industry can easily suffer losses from long term business interruption payments.

How Lucky
I’m not sure if the worldwide insurance industry truly understands the bullet that was dodged this hurricane season, as we saw the most intense hurricane to ever impact the Bahamas, which also tied the record with the 1935 Labor Day hurricane for the strongest landfall anywhere in the Atlantic. Clearly this would have been an industry-changing capital event if Dorian had stalled over Palm Beach or Miami-Dade counties with 185 mph winds and 40+ inches of rain. The losses could have easily reached $75 billion of insured loss and maybe more. The winds alone would have caused considerable damage to almost every single insured property in southeast Florida. The storm surge and flooding rains would have likely had a major impact on the National Flood Insurance Program and many of the new private markets now writing flood business in Florida. Even with 11 consecutive years (2006 – 2016) of no major hurricane catastrophes in Florida, there have been other loss issues across the state that have already strained parts of the market. Such a catastrophic event at this time would have been a big stress test for the Florida Hurricane Catastrophe Fund, considering such a Dorian-type event would be near the 100-year to 250-year event that many companies plan for on a yearly basis.

The other noteworthy (positive) impacts on the insurance industry might be the huge void of hurricane activity in the Caribbean Sea and Gulf of Mexico. In fact, only hurricanes Dorian and Barry reached hurricane-strength in those areas, which again is welcome news for the insurance industry. It always amazes me when a named storm can impact the tiny insurance hub of Bermuda, which happened this year with Hurricane Humberto.

A look ahead to 2020:
I admit that it’s way too early to make predictions for the 2020 Atlantic hurricane season, but some of the climate forcers to think about for 2020 are listed below.

  • El Niño Southern Oscillation (ENSO) is currently in a neutral state and is forecasted to stay there for the beginning of the 2020 Atlantic Hurricane Season. If this is the case, neither La Niña or El Niño will have a large influence on wind shear or storm tracks.
IRI ENSO forecast model Based Probability showing Neutral ENSO Conditions next hurricane season July August September (JAS)
  • After spiking this summer, the Atlantic Multidecadal Oscillation (AMO) index dipped back to near average in November according to the Klotzbach and Gray AMO index, as far north Atlantic sea surface temperatures are currently near their long-term average values. This could have explained the higher activity this season and could lead to lower counts next season if sea surface temperatures continue to drop.
After spiking this summer, the Atlantic Multi-decadal Oscillation (AMO) index dipped back to near average in November.

Australian Catastrophic Events In The Spotlight

Australia has been the recent focus of global media attention due to the severe bush fires and hail storms that occurred over the Australian spring months. However, questions remain if the impact to the Australian insurance industry will continue into the summer months, and if there should be heightened concern regarding the active Australian cyclone season that is already a month old.

The 2018 and 2019 storm seasons have been costly for Australia’s insurance industry, and the recent bush fires and hail storms will only add to the total loss this year. Bush fires, which continue to burn across New South Wales, have garnered worldwide attention since an estimated 104 fires are yet to be contained. Interestingly, bush fires, historically, have accounted for only about 12% (or AUD $11.1B) of the typical losses in Australia, but that does not mean fire losses couldn’t easily climb higher as they have in the U.S. in recent years. As a counterpoint, floods are also a well-known problem in parts of Australia and actually account for more loss than fire at 15% (AUD $13.6B). Hail events account for about 27% (AUD $25B) with, notably, the 1999 Sydney hailstorm at AUD $5.6B being one of most expensive events to ever occur in Australia. The most costly peril historically, however, is cyclone, which accounts for 29% (AUD $26.1B) and is why the cyclone season is so closely watched. However, even with the annual occurrence of large catastrophic events, a new paper by McAneney et. al (2019) suggests there is no trend in normalized losses from weather-related perils, which account for 94% of losses in Australia, when such losses are aggregated.

Although the bush fires and recent hail storms have been devastating, it is important to remember that, with every passing year, a greater percentage of the population is moving to large urban centers, such as Sydney. These urban centers are expanding into the bush fire risk zones, so perils are impacting a larger portion of the population than what was previously the case. The population is also expanding along the coastlines, which will make the threat from cyclones even more costly over time. Although the rising cost of natural disasters is grabbing the media attention, the cost of these natural disasters is being driven by where and how a society chooses to live. When more people live in vulnerable locations with more to lose, it follows that costs will rise. This is why it is important to look not only at loss trends, but also to consider the various trends in weather perils that cause the loss. After all, there’s no such thing as a natural disaster – only natural occurrences which become disasters because of human interaction.

 Normalised losses from weather-related events only for Australia. The slope of the regression line is not significantly different from zero and the dark grey area depicts the 95% confidence interval. Source: McAneney et. al (2019)

Eyes on the Cyclone Season
With most of the ocean basins that produce named tropical cyclones now cooling in the winter months in the Northern Hemisphere, the Southern Hemisphere oceans are heating up. Since Australian cyclones contribute to the highest proportion of the historical loss, there is a watchful eye on these seasonal forecasts. Currently, the largest Australian climate forcers are driven by two significant ocean sea-surface temperatures (SST) signatures, namely the El Niño Southern Oscillation (ENSO) and the Indian Ocean Dipole (IOD). Most have heard and know about what impacts ENSO can have across the continent and on the Australian cyclone season. SST anomalies across the equatorial Pacific Ocean, which is where ENSO is measured, had been typical of a neutral ENSO phase since April 2019. The negative phase of ENSO (La Niña), which tends to bring flooding rains and higher cyclone landfall probability to Queensland, is not forecasted to develop. The international climate models continue to indicate that the neutral conditions will likely persist until at least February of 2020. Generally speaking, a neutral ENSO phase has little influence on Australian weather. However, Australia as a whole just had its driest spring ever recorded, and the mean maximum temperature was the second warmest on record – typical of a positive phase of ENSO or El Niño. With ENSO neutral conditions in play, however, something else is driving these extremely dry conditions and above-average temperatures across the continent, which have likely contributed to the large bush fire risk across New South Wales and Queensland. If ENSO is neutral, the lesser-known IOD, which is one of the strongest in the last 60 years, seems to be the main climate forcer impacting Australian weather patterns currently. This strong positive phase creates a drying influence over parts of the country.

What is the IOD
IOD is characterized by cooler waters to the northwest of Australia, south of Indonesia, and warmer waters west towards Africa. The positive IOD contributed to low rainfall over southern and central Australia during winter months and with just as small short reprieve during last Australian summer (Dec – April) since May 2019 the IOD has been positive contributing to this overall dry pattern. In combination with reduced rainfall, positive IOD events also lead to reduced humidity across Australia. Recent months have seen notably low humidity, which enhances potential evaporation. A positive IOD is likely to remain the dominant climate driver for Australia, but, seasonally, the IOD events typically transform during the early summer as a large scale monsoon trough moves into the Southern Hemisphere which is why the IOD index below is coming off one of its strongest level in 60 years.

Diagram of a the positive phase of the IOD. Source BOM
Chart of the IOD index showing how strong it has been over the last year. It also shows the IOD is starting to weaken over the last couple months which is typical of the Nov – Jan time frame. Source: BOM

The IOD has less impact on the South Pacific cyclone season. This tends to be influenced by ENSO, which was slightly positive in a weak El Niño state about a year ago helping to explain the lack of activity for the South Pacific cyclone season, which was below average with no cyclones making landfall along the more populated east coast of Australia last year. The IOD has more influence on the cyclones that form in the northern and western regions of Australia. Since the IOD is currently positive, the overall effect should result in below-average activity for these coastal sections of Australia, which are less populated, but also contain large mining areas which could easily be impacted from cyclones that make landfall. A positive IOD should also point to higher-than-normal activity over the southwest Indian Ocean, which is where early season cyclone activity is already forming. As the season progresses, keep an eye on the SST. Over the last three months there has been warming in the waters northwest of Australia – one of the key ingredients to named storm formation. Although the current forecast is for below-normal activity, signs point to low confidence in this forecast due to the increase in water temperatures over the last few months. Overall, cyclone formation will come in waves and will rarely be spread evenly throughout the season. Quiet periods can easily be followed by bursts of activity driven by climate forcers such as the Madden Julian Oscillation, which circulates the tropics as a 30 to 60 day oscillation. Keep an eye on this climate forcer as well.

This is the Eastern Hemispheric SST anomaly with the top image being December 2019, middle image November 2019 and bottom image is September 2019. Notice the red circled area has gotten colder since September which would have negative impact on the cyclone season in this areas. The blue circle in shows a warming trend since September which could influence more named storm formation in this area.

Bottom-line for Australian Summer
Australia will experience more heatwaves and bush fires during summer, but fewer cyclones could make landfall. At least one tropical cyclone has crossed the Australian coast each year since reliable records began in 1970 with four occurring in a typical year. However, with fewer-than-average numbers expected in the various cyclone regions, this should ultimately lower the landfall probability of a named storm crossing the Australian coastline. However, the now warmer-than-normal SST northwest of Australia provides lower confidence in the overall number of cyclones that could form, possibly leading to more cyclones and more landfalls in this region of Australia. With a neutral ENSO and colder-than-normal SST off the northeast coast, below-average cyclone activity is expected.
There should also be less overall severe weather events across Australia, but this does not mean that severe weather with damaging perils like hail won’t occur. Australian summer can be hectic, and although the climate forcers suggest less risk overall due to neutral ENSO and positive IOD, wild weather will happen. One should not get complacent as severe weather season can last well into April, and it only takes one thunderstorm to cause flash flooding or hail damage and insured loss. Although many of the bush fires are started by humans, some still occur naturally from lightning strikes, so this risk will last well into the summer months.

California Wildfires October 2019

What Is The Concern For The Insurance Industry?
Like clockwork, it’s wildfire season again in California, and it appears to have the insurance industry on edge for good reason. The last two years have been extremely destructive, with insured losses reaching over $30B and, according to Milliman, wiping out about twice the combined underwriting profits for homeowners insurance for the past 26 years. Applications like Zillow make it easy to understand exposures within fire parameters, and some of the properties’ high insured values are likely eye-opening, undoubtedly worrying the insurance industry.

BMS iVison shows the USGS GeoMac Current Fire Perimeter and can show in-force risks. Other free tools like Zillow allow for cross-reference to understand risk.

However, I want to first say that, so far, the fires of the last month have caused nowhere near the level of destruction to the industry that was experienced in 2017 and 2018. Headlines like the one below are simply causing unnecessary panic. There is a huge difference between the number of structures exposed versus structures that burn.

Overall statistics from the last two California wildfire seasons suggest this year is not even in the same ballpark in terms of loss and structures destroyed.

In fact, of the current wildfires reported by CAL FIRE, only 242 structures have been destroyed, as compared to the thousands that occurred in 2017 and 2018. I guarantee that this number will climb as the assessment continues. A large fire that wipes out thousands of homes could, of course, still occur this season. But, in my opinion, the industry needs to take a deep breath and trust that the last week has been a buildup to something less extreme at the start of November. Unfortunately, the true end to the fire season is a long time from now, and I don’t see any rain in the forecast for at least the next 10 days. Lastly, we can’t underestimate the amazing work that firefighting crews are doing to try and contain these fires before any more serious damage occurs. For example, the Misty Fire near Oroville, CA was quickly attended to yesterday with air and ground support minutes after it started. These efforts limit insured loss.

New Normal of Forced Power Outages
Although the insured loss level has been relatively low, there are many issues for the insurance industry to consider. The power outages have been massive. In fact, PowerOutage.US confirmed that this is likely the largest forced outage in U.S. history, with close to 3 million people without power at one point. At a time when we are more dependent on electricity than ever – ATMs can’t operate, restaurants are closed and businesses try to limp along on backup generators – there is no doubt that these unprecedented outages are causing huge economic losses. I have seen reports that the economic costs are anywhere from $400M up to $3B, with the caveat that economic losses are complex to understand. Another important aspect of determining insurance loss is that California policies may include a “Loss of Use” provision, which would cover for hotel stays during evacuations. How many insureds are utilizing such coverage is unknown at this time, however. Regardless, this might mean an uptick in such coverage going forward. There is clearly business interruption that could also lead to increased losses.

The power outages could also cause an even greater insured loss because they complicate evacuation. Without lights to find the things they need, along with street lights and stoplights to guide them out of the evacuation zone, evacuees are helplessly gathering their belongings by flashlight and trying to leave via streets that are at a higher risk for accidents due to no traffic lights. One accident can often shutter some of the only exits out of these towns, creating the potential for an even larger loss of life from fast-moving wildfires. First responders are also challenged by the power outages.

Another issue with a lack of power is increased crime. Without video cameras or street lights to hinder criminal activity, the opportunity for insured losses due to crime is escalated. Further, a lack of power can lead to loss if towns can’t pump water. Clearly, this creates problems when trying to fight fires, but it also causes dangerous situations for businesses and residents not having access to water. Evacuation plans and supplies are critical to businesses and residents in locations that have a high earthquake likelihood in addition to wildfire potential.

Is No Trash Pick-Up Next?
Much of the focus has been on the problems endured by utility companies, but other industries are facing huge liability risks as well. A few weeks ago in southern California, a garbage truck caught fire and the driver dumped the burning trash on the side of the road (protocol to do so to save the truck). Minutes later, powerful winds blew the flames across a hillside and into a mobile home community, killing two people and destroying dozens of homes. This is another example of unforeseen risk that may be addressed by limiting trash pick-up during extreme conditions.

Evacuation Fatigue
The vast majority of evacuees will not be affected by the fires and can return to their homes without consequence. Taking a lesson from hurricane evacuation as we mark the seventh anniversary of Hurricane Sandy 2012, however, is that evacuation fatigue is real. During Sandy, many people didn’t leave because, in the prior year during Hurricane Irene 2011, calls for evacuation were ordered, but the storm weakened with limited impact to the Northeast. Some of the evacuees chose not to leave the next year only to find them themselves suffering from the impact of Sandy. I am sure evacuation fatigue is already setting in for many California residents, and unfortunately, this could cause more problems in the future as people wait longer to leave, causing major traffic jams. The fallout could be deadly.

Season Is Not Done Yet
In summary, even though it currently appears that the insured loss will be limited, the overall risk will remain high until, hopefully, a weather system around the middle of November will bring some much-needed precipitation to the west coast of the U.S. The early December fires of 2017 that totaled over $2.5B in insured losses serve as a reminder that the California wildfire season is not yet close to being done. With any luck, however, the recent events will have been the peak of the season’s activity. The insurance industry and California residents are on edge, and the forced power outages could get worse – even with massive outages, two of the major fires were caused by utility lines that were not de-energized. These outages are having large economic impacts and, to some degree, will be felt by the insurance industry going forward. On a positive note, however, they could also provide an opportunity for the development of new products to help mitigate the loss of power without physical loss to a structure.

BMS Tropical Update Oct 17th 10:00 am CDT

With each passing day in October, the chance of a U.S. landfalling named storm decreases.  In fact, since 1900, only 16 named storms have made landfall in the U.S. after October 17, but that also means that a large loss to the insurance industry is still possible.  In fact, the late fall can have some devastating storms, such as Hurricane Sandy.  While Sandy was not technically a hurricane at landfall, it still caused close to $20 Billion of insured loss.  Some storms can form rather rapidly at this time of year.  It took Hurricane Michael (October 7-10, 2018) just three days to go from a tropical depression to a Category 5 hurricane.

Historically, the majority of landfalls occurring late in the season are along the Gulf Coast, with the overwhelming majority of these being along the Florida Gulf Coast.  Some of these landfalling storms have been significant, such as Hurricane Wilma in 2005, but none of the long-range forecast models (out to October 27th) currently suggest any type of tropical trouble like Wilma, which originated from an African wave.  Tropical development from African waves become rare once the season passes the middle of October, as the Intertropical Convergence Zone (ITCZ) shifts south towards the equator and overall wind shear begins to increase across the Atlantic Basin.  This is why Tropical Depression Fifteen quickly lost its organized structure earlier this week and failed to intensify into a tropical storm off the African coastline.

In the late season, tropical troubles often arise from what is called a Central American gyre, and this is currently what the National Hurricane Center (NHC) is watching off the coast of Mexico.  This Central American gyre is a broad area of low pressure over parts of southeastern Mexico and Central America that extends into the Bay of Campeche and the adjacent east Pacific Ocean, and is typical of the late spring and early fall hemispheric weather patterns.  In fact, roughly 50% of Central American gyres have a tropical cyclone associated with them, according to Philippe Papin, a research scientist at the U.S. Naval Research Laboratory. 

As you can see from the tweet above, these Central American gyres tend to form smaller areas of low pressure, and sometimes they form on the eastern side of the gyre and rotate counterclockwise around the larger circulation.  These pieces of energy can detach from the overall gyre circulation and become independent tropical systems. 

For the last several days now, the forecast models have consistently shown that a piece of the Central American gyre will move into the western Gulf of Mexico over the next 72 hours.  If this occurs, the NHC could designate a tropical or subtropical depression or storm once it has a complete, counterclockwise surface circulation with organized thunderstorms nearby.  If it becomes a tropical/subtropical storm, it would be called Nestor.  The NHC is currently forecasting a 90% chance of tropical cyclone development.

The forecast models suggest that the system will quickly track toward the northern Gulf Coast by Saturday, and then may track inland to bring much-needed rain to areas of the southeast.  After all, the last thing the insurance industry needs is a surprise wildfire event across the southeast this fall like the one that occurred in Gatlinburg, TN in 2016.  Also as a reminder, the area where Hurricane Michael made landfall had a large amount of tree fall which will increase the wildfire risk for several years.

The flash drought continues to impact the southeastern U.S. with both above-normal temperatures and below-normal precipitation.  This will drastically change with the forecast of a wet weekend as tropical moisture makes its way across the region.

As the tropical system takes shape, it will stay weak as increasing upper-level winds over the northern Gulf of Mexico should produce enough wind shear to prevent anything of substantial strength to develop.  It’s safe to say that the insurance industry shouldn’t see a repeat of a rapidly strengthening storm like Michael last year. Currently the intensity, track, closely resembles Tropical Storm Josephine in 1996 which was a PCS loss event.  It formed in the west-central Gulf, tracked toward the northeast, and made landfall in Florida’s Big Bend area which is especially sensitive to storm surge.

Above is the model forecasted guidance from the America GFS ensemble model and the various intensity forecast models.  U.S. landfall impacts are expected to occur on Saturday, October 19 around 48 hours from now. Source

Overall, the long-range forecast continues to show a North American weather pattern that is not conducive for tropical named storm development or U.S. landfalls, as the polar jet begins to take over the weather pattern across North America and increases wind shear over much of the Tropical Atlantic Basin.  However, let’s not forget that the season continues until November 30. 

Since 1966:  83% of Atlantic seasons have had one or more named storms; 64% have had one or more hurricanes; and 21% have had one or more major (Category 3+) hurricanes; form after October 15, but the chance of U.S. landfall decreases with every passing day.

BMS Tropical Update Sept 13th 10:00 am CDT

No Rest for the Weary

The Atlantic hurricane season is far from over.  In fact, we are just a few days removed from the peak of the season.  As mentioned in the September 6th BMS Insight, I anticipated the insurance industry would have a solid seven days of rest, but this was in regard to new tropical development.  The insurance industry is grappling with the outcome of Dorian and the under-reported major Category 4 Typhoon Faxai that had a direct hit on Tokyo this past weekend.  The NHC has now classified potential tropical cyclone number nine (PTC9) in the central Bahamas, and the long-range forecast still suggests the end of September and beginning of October could have several named storms develop in the Atlantic Basin – there is no rest for the weary.

Basin Memory

If you have been keeping track of the tropical troubles so far this season, there is clearly a target on areas around eastern Florida and the Bahamas.  Dorian is not the only storm to impact these locations;  Hurricane Chantal’s origins started in this area, along with Tropical Storm Erin.  Tropical Depression 3 also made a brief appearance there as well.

The 2019 Atlantic hurricane season so far.

This is a great example of weather memory or, more commonly known to the catastrophe modeling industry, clustering.  It is a fairly typical occurrence when the atmosphere repeats a particular type of weather pattern.  We see this with floods, severe convective storms, winter storms and with tropical weather events.  There are many reasons why the atmosphere has clustering.  Different modes of atmospheric variability such as the Atlantic Meridional Mode (AMM), El Niño-Southern Oscillation (ENSO), North Atlantic Oscillation (NAO) and Madden-Julian Oscillation (MJO) have been shown to affect Atlantic hurricane activity through changes in atmospheric steering currents and vertical wind shear.

In fact, a good understanding of clustering in the Atlantic Basin is found in the paper by Kossin et al. (2010) which shows four distinct clusters of storm activity that are common across the Atlantic Basin. The best recent example of this might be the 2004 Atlantic hurricane season with Frances and Jeanne taking similar tracks and making landfall along the east coast of Florida, basically in the same general area and 21 days apart.  There are many historical examples of clustering, such as Hurricanes Connie and Diane in 1955, which hit the Carolinas just six days apart.  Because of this, some of the catastrophe modeling companies simulate clustering into their event catalogs allowing for a probability of multiple events within a season to impact similar areas of the U.S coastline.

Future Humberto?

For the last several days, there has been a tropical disturbance labeled PTC9 over the central Bahamas which is slowly becoming better organized.  The National Hurricane Center gives it an 80% chance of becoming a tropical depression or storm in the next 48 hours and a 90% chance in the next five days.  Humberto is the next name assigned for the 2019 Atlantic hurricane season.

As mentioned with Dorian, the weather forecast models have a hard time modeling ragged, sloppy, and weak tropical storms.  The current modeling suggests almost every scenario imaginable.  For example, the American Global Forecast System (GFS) keeps the system weak as a tropical depression or tropical storm, which could result in more insurance claims than what occurred with Dorian due to heavy rainfall and locally strong gusty winds reaching the U.S.  As a counterpoint, the European Centre for Medium-Range Weather (ECMWF) indicates PTC9 will develop faster and stronger and holds it off the southeast coast of the U.S.  Given the track record, I would have to buy into the ECMWF model, which makes sense if the system can stay over the warm Gulf Stream between Florida and the Bahamas. It will likely strengthen and mirror the track Dorian followed a few weeks ago.  Similar to Dorian, if PTC9 develops into a hurricane, the strongest winds will remain offshore, but this will depend on its track up the Florida coastline.  The majority of ECMWF ensemble guidance is keen on keeping PTC9 far enough offshore to limit any impact of wind, with the long-range forecast suggesting the system will take a right hook and move out to sea early next week.  However, Florida, Georgia, the Carolinas, and even Bermuda still need to pay close attention to potential damage as, currently, the system is weak and leading to higher model uncertainty.

Above is the ensemble model probability from the GFS and ECMWF  showing two different scenarios.  The GFS is less aggressive and tracks the potential named storm into Florida.  The ECMWF is more aggressive and keeps the potential named storm East of the Florida coastline.   Source: Univerity of Albany Brian Tang

Future Tropical Troubles

PTC9 might not be the only activity into early October as there is a signal that the MJO will aid in a broad-scale rising motion in the upper atmosphere, which will promote named storm development across the Atlantic Basin.  Currently, there is large-scale sinking motion across the main development region which has likely contributed to the lack of activity in this area of the Atlantic.  Multiple waves have come off of Africa, but have failed to develop into a storm since Dorian.  The MJO is a large overturning circulation that propagates east across the globe about every 30 days.  Think of it as a wave, the leading edge of which is “suppressed” and causes sinking air.  In the backside of the wave, the air is more prone to rising, which aids in named storm development.

The areas of brown and green are areas of rising and sinking air.  Notice what happens in the forecast of the MJO – a lot of green across the Atlantic.  That indicates rising air, which can aid in named storm development. Source: NOAA

The first concern for the insurance industry is PTC9, but later next week there could be other tropical troubles starting to take shape from the Gulf of Mexico to the African coastline.

BMS Tropical Update Sept 6th 12 pm CDT

To think, two weeks ago today the NHC first circled a tropical wave 1,400 miles east of the Windward Islands. This tropical wave would become Dorian and result in one of the strongest storms ever recorded globally.  The impact on the Carolinas has largely been limited to coastal areas, and the impact on Atlantic Canada is currently unknown. But, it is nearly certain that the named storm Dorian will never be used again given the historic catastrophic damage it caused to the northern Bahamas earlier this week. 

There are so many things to think about and learn from Dorian, but, to me, the most amazing fact is that one of the strongest Category 5 storms to ever occur in the Atlantic Basin was just 110 miles east of a population of 4.6 million people that were largely allowed to stay put. This speaks volumes to the confidence that exists in the short-term weather forecasting of named storms.  Forecasting can always be improved, but, overall, once Dorian approached the Bahamas, the forecast was fairly accurate in terms of indicating that Dorian would track along the entire southeast coastline.

In the end, Dorian, with all of its possible forecasted landfall locations along the U.S. coastline, finally did make landfall on the last possible piece of land – Cape Hatteras at 8:35 am EDT this morning. I hope that the insurance industry does not soon forget about this storm because of its minimal landfall appearance.  Dorian clearly showed atmospheric conditions indicating the potential for landfall as a 185 mph hurricane with a stall over the greater Miami area, likely creating an insurance industry-changing event.  The industry may want to use Dorian as a stress test by shifting the track ever-so-slightly to the U.S. coastline and modeling scenarios of 60+ inch rainfalls across the state.  Such scenarios would likely be eye-popping when considering what that amount of rain would do to the Lake Okeechobee flood control system, which is already in dire need of upgrades.  These are extreme examples, but Dorian showed that they could happen. The question is will the industry, which is largely adopting private flood insurance across Florida, act on this or dismiss the potential devastation.

While Dorian is still impacting the outer banks of North Carolina this afternoon, conditions will quickly improve today as Dorian starts to race across the North Atlantic with high winds occurring across Martha’s Vineyard, Nantucket and Cape Code before Dorian impacts much of Nova Scotia as a fast-moving Category 1 hurricane. Thus, the insurance industry could still expect some insured loss to occur in Canada. 

As Dorian paralleled the coastline yesterday, power outages increased as winds picked up speed – nearly 190,000 customers were without power in South Carolina last evening.  While the number of power outages has since decreased in South Carolina, they are on the rise in North Carolina, with over 230,000 customers without power as of this morning.

BMS iVision allows clients to run risks to better understand the various impacts of Dorian. This is the three-second wind speed gust in mph from Verisk Weather Solutions. Dorian will now be added to our Property Claims Service historical event archive which will allow clients to stress test portfolios and understand the impact of Dorian for future years of risk management.
Updated listing of peak wind gust reports from Hurricane Dorian across Georgia, South Carolina, North Carolina and Virginia received as of 12:30 pm EDT Friday afternoon. Source: NOAA

Some of the worst damage from Dorian might have come from the 25 tornadoes that impacted the region over the last two days.  

While wind and storm surge have been the big storylines with Dorian, some of the rainfall estimates have been impressive.  Wilmington, NC picked up 8.58 inches of rain, which is more rain than that city experiences during the entire month of September on average.

What is Next?

Beyond Dorian, the next area of interest in the Atlantic is Invest 94L near the Cape Verde Islands. While conditions are marginal for development and there is not much model support, the few models that developed 94L indicate a tropical storm next week.  We will see if this pans out, but I still think the MDR will be lackluster for storm development and much of the named storm activity will be in the North Atlantic and closer to North America, which has clearly been the case so far this season.  Regardless, it looks like the insurance industry has a solid seven days to rest, with the next phase of excitement coming toward the end of this month into early October when large-scale upward motion moves back over the Atlantic Basin, thus helping with new tropical cyclone genesis.

Early signs indicate tropical development over the Atlantic Main Development Region in the coming days, but the probability is low. Clearly, the Basin has storm memory this season, as the pathway for potential tropical cyclones to threaten the U.S is still strong. Source: Michael Ventrice WSI

BMS Tropical Update Sept 5th 11 am CDT

After nine days and well over 10,000 words written in these BMS Tropical Updates, it appears that the end is in sight, but not before the biggest impacts from Dorian are felt by the insurance industry.  Interestingly, though, it seems that interest on social media and other mainstream media regarding some of the impacts of Dorian may have waned because the hurricane is not as powerful as it once was and not threatening the larger population of Florida.  This seems to be the classic psychological burnout of media hype and letdown, while actually downplaying the impact of the real event for the U.S. 

Dorian is still a back up to a Category 3 hurricane that could very well still make landfall along the North Carolina coastline. If it stays at Category 3 strength it could be the first Category 3 hurricane to make landfall in North Carolina since Fran in 1996, which coincidentally made landfall on Cape Fear, North Carolina 23 years ago on September 6th.

Wind Impacts

Dorian is currently located just 50 miles east-southeast of Charleston, South Carolina, and is moving to the north-northeast at only eight mph.  The effects of the storm are being felt along the South and North Carolina coastlines.  The strongest wind gust I have observed as of 5:00 A.M., CDT, was 68 mph at Charleston Airport.  Tropical storm-force winds have been observed along the South Carolina coastline, resulting in about 240,000 reported power outages with that number likely to grow over the next 24 hours.  Dorian is still expected to track right along the coastline and could make landfall near Bald Head Island or Cape Lookout, North Carolina.  Although the strongest winds are on the right side of the storm, and will remain offshore, there is little chance that hurricane conditions will not be experienced along the coast given how close Dorian should track to the coastline.  The worst impacts are likely to occur on the Outer Banks of North Carolina.

BMS iVision allows clients to run risks to better understand the various impacts of Dorian. This is the three-second wind speed gust in mph from Verisk Weather Solutions. There will be some adjustment to this wind swath as the forecast evolves. Using the three-second gust is often the best wind speed variable to understand damage because three seconds of high winds are often all it takes to cause damage.

Tornado Impacts

Accompanying the high wind gusts embedded in some of the outer band thunderstorms could be tornadoes.  Although often weak and very localized, these tornadic winds can still cause unexpected damage compared to normal tropical-storm-force winds only.  Tornadoes often form in a hurricane’s northeast quadrant and today this quadrant will be over North Carolina.

The tornado threat is substantial with predecessor bands now onshore in eastern North Carolina.
NOAA has a 15% Probability of a tornado within 25 miles of a point.

Storm Surge

Although the moon phase has now moved away from the new super moon phase on August 30, the tidal cycles are still important in relation to the height of water inundation along the coastline.  Last night, cities like Jacksonville and Charleston may have caught a break when the highest storm surge was at low tide.  However, the forecast data for Myrtle Beach, SC does suggest that water could reach a height of 10.3 feet, which would put it at the third-highest tide in history for the city.  Other coastal cities such as Wilmington, NC may also feel similar effects as strong onshore winds push water up along the coast as Dorian slowly tracks along the coastline.  The storm surge will move into the Outer Banks tomorrow, where some of the islands are historically susceptible to water overtaking them and even creating new inlets, cutting off the islands from the only road access.  For an up-to-date view of detailed weather impacts please check out the NHC storm surge inundation forecast.

Myrtle Beach, SC Tide height forecast. Source: NOAA


As expected with a slow-moving major hurricane, rainfall and flooding will also become an issue for coastal areas.  Forecasts call for in excess of 10-15 inches to fall along the coastline.  Combined with storm surge, this will likely create areas of significant flooding or flash-flooding.

Source: NOAA

Analogs Impacts

Although I mentioned tomorrow is the twenty-third anniversary of major Hurricane Fran making landfall in North Carolina, I don’t think Fran is a good analog for Dorian.  Alternatively, Arthur in 2014 continues to be a good analog event, even if, as noted in an earlier post, it remains the only Category 2 hurricane to make U.S. landfall and not result in an insured loss, according to Property Claim Services (this is unlikely to be case with Dorian).  In other earlier blog posts I mentioned the North Carolina impacts from Floyd in 1999 and Matthew in 2016 make a good analog package.  Matthew resulted in $1.2B of insured loss to the same areas, and today Floyd would result in about $2.6B of insured loss, which seem to be a safe range of expected losses at this time for Dorian.

Other tropical troubles

We are a few days removed from the peak of hurricane season, but the Atlantic basin is still very active with several areas of tropical trouble.  The insurance industry will need to focus its attention on impacts from Dorian as there is nothing that is a threat to the industry over the next two weeks.  But, the end of this month could provide some more excitement.

BMS Tropical Update Sept 4th 10 am CDT

Florida Impacts

For the last several days, I have been suggesting Matthew in 2016 would be one of the better analog events to help understand Dorian’s potential impacts.  Now 90 miles east northeast of Dayton Beach, Florida with winds of 105 mph, Dorian is on par with the strength of Matthew, although Matthew was much closer to the coastline at 35 miles.

This morning the power outage map indicates only 15,000 customers are without power across Florida.  Power outages are a good reference to potential damage – during Matthew, for example, power outages across Florida reached over 1,000,000 customers.  The power outages are a function of high wind speeds and, thus far, they have only been of tropical storm force along the coastline.  The highest wind speed I observed this morning was 60 mph at Cape Canaveral.  During Matthew, several hurricane-force wind gusts were reported, including a 100 mph gust at the same location.  It appears that the overall Florida insurance loss from Dorian will likely be less than Matthew, 2016 which was around $1B across the state.

BMS iVision allows clients to run risks to better understand the various effects of Dorian. This is the three-second wind speed gust in mph from Verisk Weather Solutions. The wind swath product maintains the historical swath, not just the forecasted wind speed of the hurricane, so clients can get a better understanding of the wind impact from the full event.

There are signs that Dorian is tapping into the warm waters of the Gulf Stream and may regain some of the intensity that it lost to the upwelling in recent days.  The expansion of the storm’s wind field is notably impacting Florida in terms of high waves and a storm surge of 1 – 2 feet.  Since Dorian is a large storm, it takes exponentially more energy to ramp up wind speeds in the storm’s current eyewall than when it was much smaller.  At this time, I don’t expect Dorian to get much stronger as it tracks along the coastline over the next 48 hours.

Carolina Impacts

Overnight the model guidance has continued to suggest that Dorian will track very close to the coastline of South and North Carolina, with the newest ECMWF forecast indicating that the center of Dorian will track over Bald Head Island and Cape Lookout, NC as a Category 1 hurricane.  The NHC currently does not have Dorian making a U.S. landfall, but a landfall on Cape Romain, SC, Bald Head Island, NC or, especially, Cape Lookout, NC can’t be ruled out.  There is a 100% chance that hurricane conditions will be experienced along the coast given how close Dorian will track to the coastline.  The worst impact may be on the southern Outer Banks of North Carolina.

BMS iVision allows clients to run risks to better understand the various impacts of Dorian. This is the three-second wind speed gust in mph from Verisk Weather Solutions. There will be some adjustment to this wind swath as the forecast evolves. Using the three-second gust is often the best wind speed variable to understand damage because three seconds of high winds are often all it takes to cause damage.

When analyzing wind impact, it’s important to understand the design of typical structures across the Carolinas.  The following is a great online interactive map.  It should be noted that older structures would have slightly different wind speed thresholds depending on the era, but generally, the trend would be similar to what is shown below.  An assessment by the Insurance Institute for Business & Home Safety (IBHS) suggests that the residential building codes and enforcement level are not as highly ranked as Florida.  However, South Carolina is closer to Florida, while North Carolina was still behind on adapting the latest national building codes as of 2018.

Given how close Dorian is expected to track to the coastline, it will likely result in the coastal plain experiencing 5 to 10 inches of tropical storm force wind-driven rain.  The rainfall amounts will taper inland, but much of the eastern portion of central North and South Carolina could experience 1 to 4 inches of rain.

The coastal section of the Carolinas will experience the highest rainfall totals. However, widespread flooding is not expected with Dorian’s increasing forward motion. There shouldn’t be a repeat of the flooding that was experienced across the region a year ago from Florence. Source: NOAA
Given Dorian’s size as it moves parallel to the coastline, it should be expected that large waves and storm surge will cause coastal erosion. Source NHC
Current Forecasted Storm Surge Advisory Heights. Source NOAA

Analog Events for the Carolinas

I mentioned yesterday that there are many variables to consider when evaluating the potential outcomes of Dorian and one, in particular, may stand out.  When Category 2 Hurricane Arthur tracked over the Outer Banks of North Carolina in 2014, it became the only Category 2 hurricane to make U.S. landfall and not result in an insured loss, according to Property Claim Services.  So, there is a chance that the resiliency of structures and the nature of Dorian’s structure as it passes along the coast of the Carolinas may also result in minimal loss.  In addition to Arthur, hurricanes Ophelia in 2005Irene in 1999Gladys in 1968 and Donna in 1960 are all good analog events that could be used to help understand the impacts from Dorian over the next 48 hours.  The range of insurance industry loss from these events ranges from $250M to $2B for the Carolinas.

There are encouraging signs that the overall insured impacts from Dorian will be minimal across Florida, but there is still uncertainty around the potential impact to points north in the Carolinas, which will likely experience areas of insured loss.

BMS Tropical Update Sept 3rd 10 am CDT

Forever changed

After pummeling the Bahamas for the last 48 hours, the images now surfacing verify that the northern islands have been devastated and may take years to recover. Hopefully, the Caribbean Catastrophe Risk Insurance Facility (CCRIF) will help with rapid infusion of cash to assist with immediate post-disaster priorities, but the damage at this point is extensive. The Red Cross suggests in its early estimates that over 13,000 homes have been destroyed, which does not likely take into account any damage that is occurring on the island of Grand Bahamas. In fact, ICEYE, which is a tech company using satellite radar to map flooding, provided this image yesterday of the storm surge on Grand Bahamas and Freeport, which shows much of the island underwater.

Source: ICEYE

Once again, it’s remarkable that a major hurricane has been stationary just east of where 4.6 million people live along the South Florida coastline. Further, the eye of the hurricane, which could have brought relatively calm conditions to Freeport, Bahamas, was outside that city by just 20 miles and, instead, Freeport has experienced the onslaught of northwesterly 100 mph winds for over 36 hours.

It is already clear that Hurricane Dorian will have its place in history achieving several meteorological records and, once again, Philip Klotzbach has been keeping track of the notable facts.

Impact on Florida

Today Dorian will begin its long-awaited movement to the north, with much riding on the exact timing/magnitude of the turn. Intense hurricanes like Dorian wobble back and forth, so what might look like a turn towards the north may actually be this kind of fluctuation. These wobbles could also be eyewall replacement cycles, which have occurred over the last 24 hours, expanding the wind field of Dorian, as expected. Currently, the radius of maximum winds is 25 miles from the center as opposed to yesterday when it was only 8 miles. It seems that overnight Dorian’s satellite appearance has degraded somewhat as it churns up cooler water from below the ocean surface while it remains stationary just north of Grand Bahama Island. The eye remains well-defined, but it’s not quite as warm nor as symmetrical as it was when it first moved into the Bahamas 48 hours ago. Additionally, the upper-level outflow on the western side of the storm is becoming restricted as the storm begins to encounter some westerly wind shear. Thus, Dorian will likely stay at a weaker Category 3 hurricane over the next 24 hours as it tracks along the Florida coastline roughly 75 miles offshore. This should result in the majority of the hurricane-force winds staying offshore as well, since these winds will only extend about 40 – 50 miles from the center of the storm. So, it seems that the overall impacts will be similar to Matthew in 2016 or less so. For more details, please refer to yesterday’s BMS Tropical Update.

BMS iVision allows clients to run risks to better understand the various effects of Dorian. This is the three-second wind speed gust in MPH from Verisk Weather Solutions. I don’t expect much adjustment to this wind swath at this time. Currently, it shows that the damaging three-second winds will stay offshore.

Impact on the Carolinas

The water vapor satellite image below shows the trough starting to enter the Florida panhandle that will finally lift Dorian off the Bahamas. The trough contains shear and dry air that will aid in weakening the storm further as time progresses. However, Dorian is still a Category 2 hurricane so a lot of weakening must occur for it to become a minimal event to the Carolinas.

The overnight model guidance seems to trend for a higher impact on South Carolina and North Carolina as the models continue to have difficulty understanding the strength of the Bermuda High, so it is still possible that a Category 1 or 2 hurricane could make landfall in the Carolinas. Most of the model ensemble guidance suggests a track with the center of Dorian just offshore with no landfall, but the western eyewall could pass over parts of the coastline such as Cape Fear or Cape Lookout. Currently, there is a 90% probability that the coastline of the Carolinas could see hurricane-force winds. Therefore, the overall effects of wind could be higher along the Carolinas than what is observed in Florida today and tomorrow.

BMS iVision allows clients to run risks to better understand the various impacts of Dorian. This is the three-second wind speed gust in MPH from Verisk Weather Solutions. There will be some adjustment to this wind swath as the forecast evolves. Using the three-second gust is often the best wind speed variable to use to understand damage because three seconds of high winds are often all it takes to cause damage

While there are many variables to consider when evaluating the potential outcomes of Dorian, one in particular may stand out. In 2014, when Category 2 Hurricane Arthur tracked over the outer banks of North Carolina, it became the only Category 2 hurricane thus far to make U.S. landfall and not result in an insured loss, according to Property Claim Services. So there is a chance that the resiliency and the nature of Dorian’s structure as it passes along the coast of the Carolinas may also result in minimal loss, but this notion will all depend on the storm’s track, just as it has along the Florida coastline. In addition to Arthur, hurricanes Ophelia in 2005, Irene in 1999, Gladys in 1968 and Donna in 1960 are all good analog events that could be used to help understand impacts from Dorian over the next 24 hours.

At this time it is too early to determine the severity of inland flooding and storm surge, but in a faster-moving and recurving storm, the impact of the storm is typically less than if the hurricane were to approach at a perpendicular angle to the coastline like Florence did last year. Tomorrow we will have a much better idea of these impacts.