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Catastrophic weather events in 2017 left the re/insurance business with a conundrum. Record-breaking insured catastrophe losses exceeded any previous year. However, the impact of those unprecedented losses on re/insurance pricing has been less than many had hoped for or expected. Claims of nearly $140 billion have not delivered a traditional hard market.

To solve the conundrum and learn the year’s lessons, we must view the storms, fires, and floods of 2017 in a long-term historical perspective. We should not use loss data alone to define weather and climate trends; we need to also understand the impact of the growth of global wealth, as well as patterns of weather extremes.

When we do so, we find that the record-breaking losses were not so enormous, and could have been worse.  About $92 billion of 2017’s insured catastrophe losses arose from three major hurricanes according to the latest Swiss Re Sigma Report. When indexed to 2017 values, Hurricanes Katrina, Rita, and Wilma in 2005 caused insured losses of $112 billion.

We also need to consider that extreme weather memories are typically short. Catastrophe models that simulate the impact of historic storms in today’s built-up environments show that  events such as 1926’s Miami Hurricane or the 1928 Okeechobee Hurricane would cause insured losses that surpass those of 2005 and 2017 hurricane losses. When other named storms and natural catastrophes that occurred worldwide during those years are included, the insured impact on our modern built environment would easily exceeds $140 billion.

Bay Shore Drive in Miami then 1926 after Hurricane and Now. Source NOAA and Google Street View

Meanwhile there is a perception that extreme weather patterns may be changing.  In some cases the data supports this perception.  It is likely that, since 1951, the number of statistically significant regional increases in heavy precipitation events is greater than the number of declines. Strong regional and sub-regional variations modify the trend, but in short, when it rains it often rains more. However, despite the increase in these extreme precipitation events, little evidence suggests the rainwater has led to an increase in floods, with lots of regional variations.

The U.S. Climate Extreme Index quantifies the observed changes in one-day precipitation extremes across the U.S. Since 1990, there has been an increase in the area of the U.S. that has experienced a one-day extreme rainfall.

Tropical cyclones seem not to be changing. After accounting for past shifts in observational capabilities over time, the best records that started in the 1970’s suggest, globally, there are currently no significant observed trends in the number of named tropical cyclones, but the data is suggesting that, when named storms form, they have become stronger in recent years.

2017 had 18 total landfalling named storms. 14 of these had a category 1 or 2 and four of the three major categories were in North America.

As for severe weather, poor data quality makes conclusions about long-term trends problematic. Observed trends in small spatial-scale phenomena such as tornadoes and hail can be made with only low confidence levels, but more recently the data is suggesting clearly a downward trend in the number of occurrences of major tornadoes.

A lot of talk today about the anniversary of the April 2011 Super outbreak. With Joplin later next month many said after 2011 we would see more frequent major tornadoes. Here is the trend which shows a noticeable downward trend since 2011. #MajorTornadoDrought pic.twitter.com/HD3idKeAYI

— Andrew Siffert (@AndrewSiffert) April 27, 2018

With all this in mind, we should learn lessons from the 2017 experience.

• Whether it was the major wildfires in California, flooding of Harvey, the extreme winds of Irma over south Florida, or one of the many damaging hail storms; exposure management is very important and there needs to be a refocus on this simple task to limit losses.
• Valuable data will be collected from the 2017 events, especially from the high wind speeds from HIM. This data will fill critical gaps in the historical record and will be valuable both meteorologically and financially, as it will help insurers and customers by providing better loss models, and lessons for loss mitigation and resilience.
• Building codes matter. When wind-speed data is combined with claims data, we get critical knowledge of how high winds damage different types of construction. We now have validation for some wind-tunnel testing which has been lacking due to the lack of hurricane landfalls over the last decade.
• Hurricane forecast track and intensity still have a great deal of uncertainty. The 2017 landfalls raised questions about the value of early landfall loss projections, and how they could be used.
• Effectively, the people who need flood insurance do not have it.  How many more flood events like Harvey and Katrina do we need before more action is taken?
• Companies with the best business interruption (BI) insurance came out on top after an event, but few small businesses don’t have enough BI.
• Demand for certain post-event services seriously tested supply. The lack of adjusters, for example, created a major bottleneck that led to very high loss adjustment expenses.
• Given the long 10 years without major hurricane landfalling activity, 2017 was a great systems test for InsurTech.  It would appear no major lapses in these new technologies have occurred which should further expedite system enhancements in InsurTech.

You might have noticed that the first named storm (Arlene) of the 2017 Atlantic Hurricane season has formed in the middle of the North Atlantic Ocean – 815 miles west of the Azores Islands.   The biggest impact from this storm will be the discussion in the meteorology community as to whether this system should even be monitored by the National Hurricane Center.  Currently Arlene is over relatively cold ocean water (66 F (19 C)) for a tropical system, and according to satellite data, it is questionable if the system has a warm core.

IR Satellite image show the system is over 19C water.

Typically a tropical cyclone is characterized by lack of warm/cold fronts attached, a “warm core” (air is warmer in center of the cyclone than elsewhere), and persistent deep convection wrapped close to the center; these attributes are commonly referred to as “tropical characteristics” of a cyclone.

It would appear that the decision to track Arlene is very subjective: there have likely been dozens of similar systems over the last 100 years (systems that develop in water warmer than 66 F and with a marginally warm core) that have gone unclassified, including systems that have impacted the U.S. (Sept 2008 SC coast, Sept 2009 NJ).

All this matters to the insurance industry because our hurricane catalogs in the catastrophe models are tuned to the historical data, and after decades there is still no objective guidance as to what type of system gets tracked by the NHC. In some cases like Sandy, questionably categorized storms can have large impacts on landfall definitions as well.

Regardless, Arlene is now in our record books as a storm in the North Atlantic, but it will not be around for long as a strong mid-latitude trough will merge with this system later this weekend and make it unrecognizable. These early-season tropical systems should be no surprise (this will be the sixth early-season storm in the past six years). In fact, history suggests that tropical/subtropical systems in April are uncommon, but not necessarily rare. There have been a few, but they are typically short-lived and innocuous.

Historical Storms that have occurred in April

I am currently tracking the various early season forecasts for the 2017 Atlantic basin season.  I should have my views formulated in a couple of weeks.  What I can tell you right now there is no correlation for April storms and the rest of the season, partly because of a small sample size.

Three weeks ago, James Kossin published a major study in the scientific journal Nature: “Hurricane intensification along United States coast suppressed during active hurricane periods” (http://www.nature.com/nature/journal/v541/n7637/full/nature20783.html). This paper has gotten a bit of press in various insurer publications as over the last decade near term hurricane risk has dramatically influenced the insurance industry in hurricane-prone states. In short, Kossin’s paper provides valuable insight into rapid hurricane intensification during active and inactive periods of hurricane activity in the Atlantic basin (known as the warm and cold phase of the Atlantic Multi-Decadal Oscillation [AMO]). The findings suggest that approaching hurricanes are more likely to intensify before landfall during colder phases of the AMO and are more likely to weaken before landfall during warmer phases. Suggesting that during times when the sea surface temperatures are anomalously warm in the main development region, regions along the U.S. coast experience higher then normal vertical wind shear. Furthermore, the local sea surface temperatures are substantially cooler than the main development region which tend to inhibit intensification and form a “protective barrier” along the United States coastline during this period.

My very first thought as I read about this “protective barrier” was, finally, someone has scientifically proven the existence of HAARP and electromagnetic capabilities of the ionosphere that conspiracy theories suggest can also be used in weather modification and more. (i.e., a “protective barrier” created to control the weather (hurricane landfall))! (If you’re unfamiliar with the HAARP conspiracy theories that abound, then you won’t get this reference, but it’s one of the top questions meteorologists get asked, and you can learn more at http://www.nbcnews.com/science/weird-science/conspiracy-theories-abound-u-s-military-closes-haarp-n112576.)

How the Science has Changed

In all seriousness, to truly understand the impact of Kossin’s paper, it’s important to review how our understanding of active and inactive phases of the Atlantic Ocean has evolved and influenced the insurance industry. Since the 1960’s, the late Dr. Gray showed distinctly differing environmental conditions for tropical cyclone development. But not until the marked increase beginning in 1995 did insurers begin to notice what drives this activity. After the costly 2004 and 2005 hurricane seasons, a dozen and half papers highlighted a link to increased hurricane activity due to a warming world and/or the current phase of the AMO. About the same time, catastrophe modeling companies were being pressured to adjust for this increased frequency and severity that had impacted the insurance industry since 1995. Modeling companies incorporated a range of statistical analyses, and in some cases expert elicitation, to make assessment on future hurricane landfalling risk.

Mother Nature, however, does not always follow weather trends; and since 2005, the U.S. has entered what some have called a “U.S. landfall hurricane drought.” While overall named storm activity remains elevated across the Atlantic basin with some very active years since 2005 (2010, for example), many hurricanes have not made landfall as expected, which is actually influencing the long term landfall rates across the U.S. A few recent research papers suggest that scientists never settled on the exact impact the warmer phase of the AMO might have had on U.S. landfalls. Some of these papers suggest that in a warmer world, African dust and/or North Atlantic sea surface temperatures could actually encourage hurricanes to form further east or recurve before impacting North America, resulting in a lower U.S. hurricane landfall rate.

But Kossin’s paper provides new evidence that the science is not settled, and there is a lot to learn about hurricanes and the rate at which they make landfall. In general, the correlation between the number of hurricanes that develop in the Atlantic basin and number of hurricanes that make landfall is weak. This new study in Nature could explain part of this relationship as it highlights that elevated wind shear (changing wind speeds with height) and cooler sea-surface temperatures along the U.S. coast during the warm active phase of the AMO create conditions that tend to weaken hurricanes as they approach the U.S. coast. Conversely, the cool phase of the AMO makes approaching hurricanes more likely to intensify. This might conflict with ideas that some scientists suggested prior to 2004 and 2005, that the warmer phase of the AMO was correlated to more landfalls and possibly stronger landfalling storms (and fewer landfalls during the cooler phase of the AMO).

The Hurricane “Drought” can be Explained

Kossin suggests in his paper’s closing that this new research could possibly explain the recent “drought” of major hurricane landfalls. However, in late 2015 another research paper funded by Risk Prediction Initiative (“The Arbitrary Definition of the current Atlantic Major Hurricane Landfall Drought”) suggested the major hurricane drought is more a function of the definition of a major hurricane (defined as a Category 3 or higher on the Saffir-Simpson Scale) and the uncertainty in wind estimates. As an example, Ike (2008) made landfall as a high-end Category 2, but could just as easily have been classified as a low-end Category 3 at landfall. For contrast, consider a storm like Sandy (2012), which was not even classified as a hurricane at landfall, but still resulted in large wind and storm surge insurance losses.

Image created by Roger Pielke Jr. who has been keeping track of the days between major hurricane landfalls.

It’s important to remember that only 78 major hurricanes have made landfall since 1900 (117 years), which results in a particularly small sample size, and that there are likely many other factors that affect intensification before landfall. Hurricanes can experience higher levels of disruptive wind shear while turning north, which could be due to a large scale trough of low pressure or drawing in dry air from landmasses. Hurricanes can also send large waves and surge ahead of the storm causing warm water to mix with cooler water and deplete important energy from the storm as it approaches land. These vacillating factors highlight the complex interactions hurricanes may experience during a life cycle. These factors could also explain why many hurricanes have not intensified prior to U.S. landfall (with the exception of Charley [2004] and Humberto [2007]).

Future Hurricane Landfall Rate Models

As always, new research will continue to become available and catastrophe modeling companies will continue to judge how the science best fits into catastrophe models. This new research should not discredit near term view modeling work. Hindsight is 20/20, and as Hall, T.M., and K. Hereid, 2015: The frequency and duration of U.S. hurricane droughts paper suggests several observations point to the current drought being more a case of good luck than any shift in hurricane climate. Therefore this luck could have swayed higher then normal insured losses in a completely different direction over the last 10 years. These facts highlight why it is important to continuously evaluate new science. Modeling companies need to ensure they avoid knee-jerk reactions to industry demands or speculative science. Seasonal hurricane forecasts are improving, and with time, multidecadal sea surface patterns and other variables could help clarify the cause of reduced landfall rates, not just in the Atlantic basin, but in other basins near high exposure. El Niño/Southern Oscillation (“ENSO”) and other variables could also be worked into the landfall rate catalogs produced by model vendors.

As pointed out in this blog, the science might not be settled on hurricane landfall rates and what drives these rates during particular climatic conditions. Although it is short by climate standards, the U.S. landfall hurricane record is one of the best natural catastrophe databases insurers have to understand frequency and severity. There is a reason why catastrophe model companies calibrate their models to the longest period of record available.

There is plenty of room for debate about near term hurricane landfall rate models, the drivers of this risk, and what position an insurer should take regarding rate models. Are they a good idea or a bad idea? Should a blended approach be used? Those are interesting questions and a worthy topic, which is why I will be moderating the session, “Is Near Term vs. Long Term View of Hurricane Risk Over?” at the February RAA Cat Management Conference. We hope this subject generates lively discussion and hope to see you there!

Now that Matthew’s story is complete, immediate attention will turn to Nicole, a tropical storm currently 450 miles south of Bermuda. The models generally agree that Nicole will slowly strengthen back into a hurricane and that there is a good chance that Matthew will become a strong category 1 or weak category 2 hurricane as it tracks close to Bermuda this Thursday.
So with no tropical troubles threatening the U.S. coastline in the immediate future, this is the time of year that the insurance industry often wonders if there is any other tropical trouble forecasted for the remainder of the year.

Climatologically over the next two weeks we tend to see stable named storm activity, but after October 18th, the activity in the Atlantic Basin drastically trails off.

This is also roughly the time of year that the West African – Cape Verde type hurricane season trails off due to the equator-ward shift of the African Monsoon. This past weekend the overall tropical rainfall seemed to shift below 10 degrees north latitude, which is the benchmark for tropical waves coming off Africa to obtain enough spin to become named storms.

Here is a look at the tropical rainfall totals since mid July. It shows the height of the African Waves during middle of August with a trailing off over since this period. The axis to the left is latitude showing a trend towards the equator.

This is also the time of year that colder Canadian troughs of low pressure air start to invade the U.S. Often these weather systems leave trailing cold fronts that sometimes extend into the southern Gulf of Mexico or Caribbean. Low pressure can form at the tail end of these fronts, and if the water is warm enough in the Gulf or Caribbean, it can encourage tropical convection which could then become organized. These typical developments are consistent with some of the models’ long-range weather forecasts for later next week.

Forecasts for Thursday morning show an area of low pressure moving across the upper Great Lakes, which could provide the first freeze of the year for the upper Midwest. This forecast also shows Nicole moving toward Bermuda.

This low pressure moves across the north Atlantic late next week, and it leaves a trailing cold front with an area of low pressure off the east coast of Mexico in the western Caribbean. This is the area that needs to be watched for tropical trouble later next week as the water in this area is plenty warm enough to support tropical convection.

The long range forecast from Oct 17  – Oct 24th  total precipitation plot below show a decent amount of rain which could be  from  convection thunderstorms.

The graphic below illustrates the climatological pattern that is typical of tropical storms that originate in October so the Western Caribbean is the place to watch over the next three week.

Mathew End Game

Matthew is now classified as a post tropical storm as the majority of its energy has merged with a mid-latitude frontal system.   As a result Matthew will once again defy the long range forecast models that had suggested Matthew’s energy would travel southward towards the Bahamas.  Now Matthew will go out to sea just like the majority of tropical systems and Matthew’s long story will end.

Matthew Forecast issued at 8 am EDT Saturday Morning. Showed Matthew likely taking a southern track in the long term

Almost a complete 180 degree change in the direction Matthew is expected to take in today’s 8 AM NHC official forecast. Now Matthew is expected to track north of Bermuda.

Flooding

However, the damage is done and it is becoming apparent that water related damages could add up to more than the wind related damages.   In fact’ the water damages will continue to add up as many major rivers in Carolinas are expected to hit record flood levels.  In some cases there have been dam breaks which is reminiscent of the incredible rain event just over a year ago from tropical moisture from Hurricane Joaquin.  So with major rivers still rising, the flood situation is still unfolding, particularly in North Carolina which will lead to more losses in the next few days. However, it is assumed the majority of the inland flooding / river/ storm surge losses are either uninsured or are being assigned to flood policies by the NFIP.   As shown yesterday, the National Flood Insurance Program take-up rate by counties which are heavily coastal in nature across northern Florida through the Carolinas decreases for inland counties.  Therefore the majority of insured losses should be driven by wind related claims.

Record flooding forecasted at Goldsboro, NC

Record Flooding forecated for Kinston, NC

This record river flooding is a result of heavy rainfall which in some places has totaled more than 12”

Past 7 Days of Rainfall observed. It should be noted BMS iVision also has a rainfall layer users can use to understand risk impacts to flooding.

As highlighted in yesterday’s update storm surge has also done a lot of damage along the entire coast from Flroida up to North Carolina.

• Mayport, FL 3.28 feet:  Previous record of 2.47’, during Hurricane Jeanne on September 27, 2004 (records since 1928.)
• Fort Pulaski, Georgia 5.06 feet:  Previous record of 3.40’ during the October 15, 1947 hurricane (records since 1935.)
• Wilmington, NC 8.21 feet:  Previous record of 8.15 feet during Hurricane Hazel in October 1954.

Vilano Beach homes, and what’s left of the dunes they were built on @FCN2go#FCNStormpic.twitter.com/MXhUjIF6ss

— anne schindler (@schindy) October 8, 2016

Notice in the image above however that one of the areas hardest hit by winds in Florida right along the coastline. Most of the homes are relatively undamaged from this view.   Other damage from University Florida Damage Assessment group find minor roof and exterior damage along parts of the Florida coastline with surge leading to most of the damage observed.

Wind damage

As pointed out several days ago, treefall would be enhanced due to the saturated soil conditions in the Carolinas. With this combined with wind gusts and the lack of any significant large scale wind event over the region in several years, wind related tree damage could increase insured losses.

Since wind related damages will likely drive the insured loss, users of BMS iVision can now get a full picture of Matthew’s wind swath by looking at the 1 minute wind speed and 3 sec gust wind speed.   In the coming days   users will find wind duration information.

BMS iVision Verisk Climate 3 sec wind gust swath for Matthew

Industry Loss

The only public report of insurance industry loss numbers was in a report issued Saturday afternoon by, CoreLogic, which estimates Matthew’s insured losses to range between $4B to $8B with 90% of loss being driven by wind claims, 10% by storm surge.  These estimates are well below the industry loss estimates projected by the major catastrophe modeling firms late last week.  However, they are somewhat inline with the other industry loss numbers from other modeling firms (not yet released publicly).

While Matthew was within 20 miles of bringing much larger insured property losses, Phil Klotzbach of Colorado State has compiled the historic statistics on Hurricane Matthew.

Hurricane Matthew Records/Notable Facts Recap (through October 8)

Intensity

• 80 mph intensification in 24 hours – the 3rd strongest rapid intensification in the Atlantic on record (trailing Wilma-2005 & Felix-2007).
• 31st Atlantic Category 5 hurricane on record and the 1st since Hurricane Felix (2007)
• Lowest latitude Atlantic Category 5 hurricane on record
• 6th lowest MSLP for any Atlantic October on record at 934 mb (trailing Joan, Opal, Mitch, Wilma & Joaquin). Consistent MLSP records date back to 1979.

Longevity

• Longest-lived Category 4-5 hurricane in the eastern Caribbean (<=20°N, 90- 60°W) on record.
• Generated the most Accumulated Cyclone Energy on record for any hurricane in the eastern Caribbean
• Maintained Category 4-5 hurricane strength for 102 hours in October – the longest that a hurricane has maintained Category 4-5 strength on record during October in the Atlantic
• Maintained major hurricane strength for 7.25 days – the longest-lived major hurricane forming after September 25 on record and longest lasting at any time of year since Ivan (2004). Tied with Fabian (2003) for 5th longest major hurricane in satellite era (since 1966)
• Currently ranked 8th for Accumulated Cyclone Energy by an Atlantic hurricane in the satellite era

Landfall

• 1st Category 4 hurricane to make landfall in Haiti since Cleo (1964) – 1st Category 4 hurricane to make landfall in Cuba since Ike (2008)
• 1st time on record that a major hurricane has made landfall in Haiti, Cuba and the Bahamas
• 2nd time that a Category 4 hurricane has made landfall in the Bahamas since 1866 (Joaquin-2015 was the other)
• 1st hurricane to make landfall in South Carolina since Gaston (2004)
• 1st hurricane to make landfall north of Georgia in October since Hazel (1954)

Note: While Atlantic hurricane records go back to 1851, there are likely underestimates in storm intensity prior to the satellite era (since 1966) and especially prior to aircraft reconnaissance (since 1944).

Matthew Weakening

Matthew has weakened from a category 3 hurricane yesterday afternoon down to a category 1 hurricane overnight.  Matthew has officially made landfall near Mcclellanville, SC as a category 1 hurricane.   Matthew has weakened due to a shallower continental shelf and lower ocean heat content. Also as Matthew has tracked further north it has been able to wrap in some cooler, drier air into the center of its circulation allowing some weakening.

Over the next day Matthew will continue to weaken as it moves along the South Carolina coastline before it moves out into the Atlantic near Wilmington, NC where it will start to track southeastward. The biggest impacts over the next 24 hours will be inland flooding as the rain shield from Matthew extends across the Carolinas and into the southern  Mid-Atlantic states as the warm moist air from Matthew rides up and over a frontal boundary across the eastern United States.  Just one year after hurricane Joaquin, enhanced rainfall parts of the Carolina’s could see 5 – 14 inches of rain again.

Total radar observed rainfall over the last 7 days

Percent of homes that have flood policy thru National Flood Insurance Program (NFIP). Very low take-up rate inland.

Overnight Impacts

Storm surge has been the biggest impact overnight. Savannah, GA  has seen record flooding breaking the previous record which was created during hurricane David in 1979.  Other hard hit areas by high storm surge were Tybee Island, GA, Hilton Head Island, SC and Charleston, SC.   However, it would appear the overall height of storm surge was 2 feet below what was forecasted for many of these areas.

Tide Gage at Fort Pulaski near Savannah, GA

It has been a long time since a hurricane of this strength has impacted the Georgia, South Carolina coastline.  In fact a few years ago I took a trip to Hilton Head Island, SC and I could not believe the over growth of foliage on the island, which was likely due to the fact this area has not recently been hit by a hurricane.  Hurricanes are nature’s way of cleaning out some of that foliage.  I expect this could lead to some higher than normal insured loss from tree fall right along the coastline.   The maximum wind gust record at Hilton Head, SC was 87 mph and Tybee Island, GA was 96 mph.

Check out this huge tree become uprooted after strong winds from #HurricaneMatthew! pic.twitter.com/MrNNceeyAB

— News4JAX (@wjxt4) October 7, 2016

BMS iVision shows the historical 3 sec Max Wind Gust and now the forecasted wind gust. This allows clients to get a complete picture of possible wind damage.

Matthew Extended Forecast    

Later next week Matthew will be a tropical storm or depression off the southeastern U.S.   It would now appear that Matthew’s energy will reach the Bahamas and even track south into the southern Gulf of Mexico later next week, however, not as a named system.   Hurricane Ivan in 2004 made a similar large loop and reformed in the Gulf of Mexico.  No models at this time forecast Matthew reforming in the southern Gulf of Mexico, but this is something to watch out for. In the next three weeks this would be the area to watch for new tropical development.     There is still a chance that Matthew will get caught up with hurricane Nicole in the Atlantic and move out into the open ocean later next week as well.

ECMWF ensemble forecast showing many of the 51 members tracking the remnants of Matthew south of the Florida keys next week.

Summary

• 4,001days: that is how long it has been since a major hurricane (Wilma) made landfall in south Florida. And today, Matthew, the violent end to the U.S major hurricane drought, rages into day two.
• Many of the hurricane models that forecasted a central Florida landfall were clearly wrong, as Matthew is currently 35 miles off the coast of Cape Canaveral as a 120-mph category 3 hurricane. Even the trusted ECMWF model predicted a central Florida impact yesterday. But there are some model winners. The BMS iVision Verisk Climate wind model never predicted a landfalling outcome. And yet again, we see that there is continued room for improving hurricane track and intensity forecasting.
• As I suggested on October 5, hurricane track will drive outcomes. I also mentioned that the storm size would make a difference, and Matthew’s hurricane force winds never really expanded.
• Matthew is now expected to parallel the Florida coastline and slowly weaken, so insured loss should be confined to near-coastal areas close to its current location and up to the southern North Carolina coastline.
• Matthew is forecasted to stall or loop near the southeast coast of the U.S.

Landfall and Wind Impacts

“Landfall” is defined as the center of low pressure that intersects with the coast. This has not occurred with Matthew. For several days, weather models suggested that Matthew’s ultimate landfall (or lack thereof) would be determined by just a matter of miles. What might be more interesting than whether or not Matthew makes landfall is the fact that the last two largest U.S. insured losses from a hurricane will ultimately be caused by storms that failed to make landfall. Sandy (2012) was never officially classified as a hurricane and thus didn’t make landfall. Matthew may never make landfall, but will still likely cause significant insured loss; most likely the highest insured loss since Sandy.

Matthew never grew in size as expected, and for the most part, always maintained a very small area of hurricane force winds. This area grew only nominally as it moved north as illustrated in the NHC wind history plot below.

Past extent of the hurricane force winds and tropical storm force winds

Matthew has maintained its track parallel to the Florida coastline overnight, as it never got pulled landward, and the hurricane-force wind around its small center of circulation have primarily stayed off shore.
This will likely mean that insured losses will be limited, so in some cases insurers will ultimately retain a greater portion of their losses (versus collecting on higher attaching reinsurance programs designed to respond to major natural catastrophes). These retentions could add up, especially since it has been 35 days since hurricane Hermine impacted the state and caused minimal insured loss primarily retained by insurers. Still, the full extent of insured losses will continue to develop as Matthew continues to track up the north-Florida, Georgia, and South Carolina coast.
Wind Reports

I have yet to identify a hurricane-force wind speed recorded at an official weather station. The highest wind gust I have seen so far is 74 mph, recorded at Vero Beach, Florida. This would not translate into a hurricane-force wind, which must be measured at 1 minute resolution. There have been other reports of high wind, especially on the high tower near the Cape Canaveral coastline. Keep in mind, however, that many of these towers are hundreds of feet tall, and much higher than the official 30-foot measuring height.  Other higher windspeed gusts could occur yet today as Matthew tracks very close to the Florida coastline.

Strongest wind guest from observations last nights

Although structures will likely sustain damage given the observed wind speeds, ultimate damage should be minimal. To illustrate, see the damage plot below for a pre-2002 home that experienced category2 wind speeds. The outcome shows 35% probability of at least roof sheathing damage. Probability drops to a 5% for a category 1, and even less for a tropical storm force wind.

General  probability of at least roof sheathing damage vs wind speed

Rainfall
As one would expect, and as my blog previously suggested, flooding can be expected in Georgia and the Carolinas as Matthew tracks northward.

NOAA rainfall forecast showing 13 inches rainfall for areas of the coastline

Surge
Storm surge has not been as bad as forecasted. Areas with 9-foot surge forecasts ultimately experienced only 6-foot surges. However, high storm surge values are still forecasted for coastal Georgia and South Carolina as Matthew works it way northward. Currently some of the highest surge forecast values are found along the North Georgia.

Water value observed near Trident Pier, FL showing the build up storm surge at this station in this area and the fall of that water as the storm passed and the water gets pulled away from the shoreline.

Matthew Just Won’t Go Away
The burning questions seem to be, “Is Matthew really going to do a loop off the southeast coastline? Is this possible?” Yes, it is very possible, but also unusual.
Gordan (1994), Felix (1995), Ivan (2004) and Jeanne (2004) are all examples of looping storms. However, as indicated in the plot below, south or even southeast hurricane movement is rare, as most trajectories for Atlantic hurricanes track northeast.

Hurricane Gordon 1994 did a nice loop off the southeast coast

Another burning question is, “Will Matthew loop back and impact the Bahamas and Florida again?” It is possible and still a possible outcome on many of the long-range ensemble forecasts. My bet is that Matthew will loop northeast of the Bahamas, but then be kicked back out to sea toward Bermuda around Thursday next week.

ECMWF track model showing the chances of the Matthew getting back to Florida or Bahamas

Summary

• Matthew is a weak category-4 hurricane and will likely slowly strengthen today as passes over Nassau, Bahamas.
• Matthew will likely make landfall between Jupiter, Florida, and West Palm Beach, Florida, as a category-4 hurricane. Landfall should weaken Matthew to a category 2 by the time it reaches Daytona Beach, Florida, and then travels up the coastline. I don’t anticipate that the center will track more than 10-20 miles inland.
• There is a very small chance that Matthew will become a category 5 hurricane before it reaches the Florida coastline, as it will likely strengthen until its inner core starts to interact with the Florida coastline.
• Estimating the maximum storm surge is a bit complicated as these forecasts depend on Matthew’s track and strength as it travels up the Florida coast. If Matthew weakens due to land interaction, surge will be less severe; but if Matthew stays off shore, more water may move onto the coast, and this surge could be further complicated by multiple tide cycles that are expected during Matthew’s move up the coastline.
• Given the large amount of exposure along the coast and expected wind gusts of 144 mph, this will no doubt be a significant insured loss event. For specific impacts, each National Weather Service (NWS) office is offering detailed forecasts for Matthew.
• In the longer-range forecast, Matthew will likely loop over or the stall off the southeast coast this weekend or early next week. This will limit insured losses in locations that are north of South Carolina.

Forecasted Landfall Location and Specifics
As I have mentioned, Matthew is tracking over very warm water in the Bahamas. This warm water will continue to fuel Matthew until it starts to interact with the Florida coastline tomorrow morning. Keep in mind that hurricane-intensity forecasting is typically more predictable than hurricane-track forecasting. Matthew already surprised us this past weekend with rapid intensification to a category-5 hurricane in the southern Caribbean. It should be noted that, currently, no model guidance is forecasting further rapid intensification.  The intensity guidance below show most models are in the camp that Matthew will be category 4 hurricane at landfall or along the Florida coastline.

With Florida land interaction expected in the 36 hours. The intensity of Matthew should weaken considerable especially if it tracks inland a bit vs staying over open water.

For the last week, meteorologists have used the long-range hurricane models to predict Matthew’s track. We are now within what is considered the short-term forecast window where higher-resolution weather models become a bit more useful for providing specific hurricane forecasting.
HRRR (High Resolution Rapid Refresh) is a high-resolution (3K grid resolution) model which shows the details of a hurricane and its impacts. This model is updated hourly and forecasts the next 18 hours. Here is the latest hourly forecasts.

My general expectation is that Matthew will make landfall and track inland 10-20 miles along interstate highway 95. This counters some high-resolution models that suggest Matthew will track along the Florida coastline. Three of these models are the HWRF, GFDL and Verisk Climate model (which is the basis for BMS iVision).

HWRF Forecasted Wind Swath. This is not surface wind speeds These are winds at 900 mb which close to the surface.

GFDL Forecasted Wind Swath. This is not surface wind speeds These are winds at 900 mb which close to the surface.

This is the National Weather Service (NWS) Forecated wind swath

BMS iVision Verisk Climate wind swath which is a version of the WRF model. Users of iVision can use this product to get an ideas of risks impacted by wind speed.

One important point I want to make is no numerical weather prediction model is at a high enough resolution to resolve the details of surface roughness. It is this surface roughness that would likely weaken the winds inland. So many of the modeled forecast plots above are likely overestimating the wind speed. This is particularly apparent in the National Weather Service forecasted wind swath.

At this time, much can be gleaned from the various NWS forecast products because they offer great detail on potential impacts. These details include likely power outages, specific areas that are prone to flooding, tornado threats, etc. Many of these NWS offices offer public video briefings as well. In some cases the wording is quite strong, and for good reason, as Matthew is a dangerous, life-threating storm.

Estimating the maximum storm surge is a bit complicated as these forecasts depend on Matthew’s track and strength as it travels up the Florida coast. If Matthew weakens due to land interaction, surge will be less severe; but if Matthew stays off shore, more water may move onto the coast, and this surge could be further complicated by multiple tide cycles that are expected during Matthew’s move up the coastline.  Please utilize the new NHC storm surge forecast guidance. This guidance will change with the NHC track forecast. Right now the worse storm surge will occur in north Florida where the continental shelf extends out into the Atlantic and water will have more time to pile up.  Surge values in this general area could be greater than 9 feet in isolated locations.

Storm Surge Forecast For Jupiter, FL

Storm Surge Forecast For St. Augustine

Another issue that is not being talked about much is the possible flooding of Lake Okeechobee. The lake level is very high right now at 15.78 feet.  A  risk of flooding starts to occur if this lake reaches 17″. If the lake level goes up to 20″ this could be a major concern as this is a known dike that is dire need of upgrades and if given to much stress it could break if water levels get too high. Matthew will no doubt raise this lake level.   The Weather Channel has a good summary  of the risk.

Long Range Forecast

As we have seen for over the last week, Matthew’s long-range forecast remains uncertain. But the chance of significant insured loss at locations north of South Carolina is declining. Many global models suggest Matthew will loop off the southeast coast. Some of these model solutions even take Matthew back into the Bahamas or Florida, and in one extreme case, back into the Gulf of Mexico. Most likely, Matthew will sit and stall near the southeast coast and weaken while doing so. Matthew will eventually be kicked out into the Atlantic Ocean. However, as with any long-range hurricane track forecast, a lot of variables are at play, so Matthew’s long-range tracking still requires watching.

The newest ECMWF forecast which has shown the best skill in the long range 3+ day range

Summary

• Matthew has weakened slightly due to interaction from Cuba and Haiti yesterday and is currently still a weaker Category 3 hurricane 115 miles south of Long Island Bahamas. However, it will only take 12 – 24 hours to regain strength into a stronger category 3 or 4 hurricane as it nears the Florida coastline.
• Wouldn’t it be something if a major hurricane comes within miles of the Florida coastline and the major hurricanes drought lives on?  How about the fact than that the last two major hurricanes to impact the U.S. never made landfall?  This is still an option as some models keep Matthew from making landfall and other models have it making landfall in Florida.    I have no change in the analog storms provided in yesterday’s update as it relates to southeast impacts.
• When a hurricane is forecast to take a track roughly parallel to a coastline, as Matthew is forecast to do from Florida through South Carolina, its impact can vary greatly depending on this final track. A small deviation of the track to the left of the NHC forecast could bring the core of a major hurricane onshore, while a small deviation to the right could keep all of the hurricane-force winds offshore.
• Depending on location some parts of the southeast have been fairly wet over the last 30 days. This could amplify the inland flood threat and increase tree fall where the ground could be saturated.   As much as 5 to 7 inches of rain is forecasted for coastal areas of the southeast.
• There is still uncertainty in the long range forecast. As mentioned almost a week ago there is a chance Matthew would do a loop off the southeast coast.  More and more model runs are coming around to this idea.  This decreases the threat to northeast impacts late this weekend and into next week.  However, this increases the chances that the Bahamas or even Florida could see a second landfall from Matthew.  Rising issue of hour clauses and what part of the storm caused the loss if this scenario occurs.

Expect Strengthening

As expected Matthew has weakened slightly due to interaction from Cuba and Haiti yesterday.   However, as stated almost a week ago the water along the forecasted path of Matthew is very warm and should allow for Matthew to strengthen as it moves closer to the Florida Coastline.  I was also expecting Matthew to grow in size as currently the hurricane force winds only extend out 40 miles from the center of Mathew.  Depending how far off shore Matthew stays will determine the strength of the hurricane north of the Bahamas.  If Matthew stays off shore I still see no reason why Matthew would not become larger and stronger than the current NHC forecast.

Tropical Cyclone Heat Potential highlighting the water over the Bahamas is near the top of the scale. Lots of energy for hurricane growth.

Current Hurricane Matthew Intensity Guidance

Tricky impact forecast

As you might imagine the overall impact of Matthew on the southeast coastline will depend ultimately where it tracks along the coast or if it makes landfall.  The NHC sums up the overall uncertainty here in its key messages.

To illustrate the point let’s take the current NHC forecast point near West Palm Beach, Florida, and shift an illustrated impact area 10 miles on either side of that point.  As you can see the overall track of the storm makes a big difference.

Image credit Bryan Wood

There is still a risk of storm surge potentially affecting certain coastal locations. Overall, the Atlantic side of Florida has a steep shelf offshore which tends to protect the coastline from large surge.  However, wave action could be a concern given the lack of beach area along the east coast of Florida.  As stated yesterday the direction of Matthew to the north will also mitigate the most significant of surge threats but this threat increases in northern Florida and in Georgia and the Carolinas.  Again, like wind impacts, the surge impacts are dependent on the size of the storm, the intensity, and the track.

Latest 3 sec wind speed swath in BMS iVision

Other impacts to think about

With the understanding that it’s been a long while, over 10 years, since a major hurricane impacted Florida and in some cases a major hurricane has never impacted parts of Florida.  This means the overall foliage is likely over grown and needs a good cleaning.   It is Mother Nature’s job to do this and if it has not been done in a while this can surely increase insured loss. We can also look to see if tree fall has a higher likelihood of occurring due to wet soil conditions.     Some parts of the southeast have been fairly wet over the last 30 days. This could amplify the inland flood threat and increase tree fall where the ground could be saturated.   As much as 5 to 7 inches of rain is forecasted for coastal areas of the southeast.

Rainfall over the last 30 days for the Southeast U.S.

Departure from normal of this rainfall over the last 30 days. In some locations the rain might be a welcome sight as it has been dry.

NOAA Seven Day Rainfall Forecast

Northeast impact or Loop?

With any hurricane forecast there uncertainty in the long range forecast.  As mentioned almost a week ago there is a chance Matthew would do a loop off the southeast coast.  More and more model runs are coming around to this idea.  This decreases the threat to northeast impacts late this weekend and into next week.   It is still too early to have complete confidence in this shift.  However if this does occur maybe we will have yet another example of a hurricane that loops.  This would also increases the chances that the Bahamas or even Florida could see a second landfall from Matthew.  Rising issue of hour clauses and what part of the storm caused the loss if this scenario occurs.

A large GIF annimation of 00z GFS 240-hr forecast at full-res 13-km showing surface wind speed.

http://weather.graphics/gfs_2016100500_uv10m_s_watl.gif

Like what even… The 0z GFS is just another reason why meteorologists drink #Matthew 🍺 🍺 🍺 pic.twitter.com/nBmVxlHWn1

— Eric Webb (@webberweather) October 5, 2016

Summary

• Matthew will cause U.S insured loss based on current analog tracks.
• Matthew will be a major hurricane as it tracks along the East Coast of Florida up into North Carolina.
• The NHC still does not see this as a major hurricane impacting North Carolina, but I do if the storm stays off shore.  I still also expect Matthew to grow in size to a much larger hurricane than it is now.
• Matthew still has a chance  at making a Florida landfall as surface friction could get pulled in.
• Matthew will no doubt be a devastating hurricane for Haiti and the Bahamas.
• It’s been nearly four years since the last Tropical Storm Watch has been issued for south Florida. This has now issued by the National Weather Service hurricane warning and evacuations could soon follow.

Time to start talking U.S. Insured Impacts

*The impacts below are for the current NHC forecast track which keeps Matthew off the coast of Florida as it tracks up the east coast of the U.S for the next five days.   Here we mostly focus on Florida impacts.

Current NHC forecast in iVison

The first thing to consider in terms of wind impacts will be to understand that the strongest winds in a hurricane in the northern hemisphere occur on the right side of the storm. On the right side of the hurricane the winds also extend out from the center the furthest.   On the left side of a hurricane the winds extend from the center of a hurricane less and the winds can be slightly weaker.   Since Matthew is forecasted to track up the East Coast of Florida the weaker side of the hurricane will be impacting the coastline.

Clearly the closer Matthew tracks to the coastline the higher the wind impact might be. Also if Matthew grows in size, as I expect it to do, the impacts could be worse.  Given the current forecasted track by the NHC generally hurricane force winds would only be experience right at the coastline and tropical storm force winds would extend at most 20 – 40 miles inland.

To aid in understanding wind impacts BMS clients have access to Verisk Climates custom hurricane wind field forecast.   This is just one forecast of many and is subject to the same errors of other forecast model output, but users can get an understanding of how winds impact their portfolio.

Current Verisk Climate Modeled windfield in iVison. This forecast is just one of many forecasted tracks Matthew could take over the next few days.

Storm surge will be an issue for the entire coastline as the storm moves along the coast of Florida, but since the storm will parallel the coastline the surge would not be as bad if the storm were impacting the coast in a perpendicular direction.  Here is a link the the NHC current storm surge guidance. Of course inland flooding could also be a concern with a large amount or rain falling over a short period of time.

Depending on coverage wording Business Insurance (BI)  losses could result due to evacuations.  The last time a storm tracked up the east coast (Floyd 1999) it caused a massive evacuation of the Florida Coastline.  As the storm turned to the north across the Bahamas, a progressively larger area of the Florida coastline was threatened. It is estimated that Floyd was at the time the largest peacetime evacuation ever in the U.S., with around 2.6 million evacuating coastal areas in Florida, Georgia, and the Carolina’s.

Analog Events

I have spent a good amount of time going year by year to find a good set of matching analog historical storms that took a similar track to Matthew’s.  There is no perfect fit as every storm is different, but the following storm can help insured understand what impacts might occur to their portfolio of risks.  Estimated insured losses from historical events is not an exact science, there are known changes to wealth, population, etc, but the normalization of these damages can help compare losses if they all struck land today. This research has been carried out by Pielke Jr. et al 2008 and have been adjusted by BMS to account for insured loss.

Floyd in 1999 tracked up the east coast of Florida as a category 3 / 4 hurricane and made landfall in North Carolina as a Category 2.   Floyd at the time caused $50m in insured loss to Florida and today would cause an estimated 4.8B in insured loss to other east coast states.

Hurricane Floyd 1999 Track

David 1979 could also be used as an analog event but the storm tracked very close to the Florida coastline, closer than Matthew is forecasted to.  David was also only a category 2 along its path.   It is estimated that David would cause 1.6 billion of insured loss to Florida and Georgia in today’s dollars. Clearly a stronger hurricane along its path this close to the coastline would cause higher losses.

Hurricane David 1979 track

An older analog that actually made landfall in Florida would be Unnamed Storm 1 1926 (Different then the Great Miami Hurricane of 1926) Today this storm would cause 3 Billion in insured loss today.

Hurricane Storm 1 1926 – Track with Florida landfall which is still an option.

Could Matthew make U.S Landfall?

Currently the NHC official forecast keeps Matthew off shore as a major hurricane with a landfall in the Outer Banks of North Carolina.  However, there are still several forecasts that result in a landfall either in Florida, Georgia, or South Carolina and these states are still in the cone of uncertainty.   The exact location of a landfall or track won’t be known for another day or two.   If Matthew tracks close enough to land frictional effect could pull the storm inland, but given Matthew is forecasted to move at a slower speed this effect is less likely to occur. As we have seen there is a consistent westward shift in model tracks and if this occurs the landfall possibilities will continue to increase.   There is a 80% chance the coastline of Florida will experience tropical storm force winds.  The chances of Florida experiencing hurricane force wind speeds is 30%.

It should also be noted that some model runs still stall Matthew off the North Carolina coastline which add to the forecast complexities in the long term.  At this time northeast impacts appear to be limited as Matthew would stay out at sea.