Even If Irene Stays Offshore, Insurance Claims Could Be Significant: Willis

While it’s still unclear if Hurricane Irene will make landfall or stay offshore the East coast this weekend, a storm its size can create significant storm surge and will likely result in significant personal and commercial property claims, a major insurance broker is warning.

Broker Willis said that even if the storm weakens as it approaches highly-populated areas, it will still do damage.

The latest forecast has Irene skirting the Eastern seaboard, with the outer banks of North Carolina likely taking the brunt of it because it will still be a Category 3 hurricane when it passes there, according to Dave Finnis, leader of the property practice for Willis North America. The mid-Atlantic states will also feel the storm as it goes by as a Category 2.

“The storm is then pointed at the New York metro area, but hopefully it will weaken to a Category 1 with winds right around 75 mph. At that point it should be a storm surge and rain event because we would hope that coastal areas are able to withstand minimal hurricane force winds,” Finnis said.

“The other incredible feature of this storm is its width, which is roughly 400 miles wide, so even if its course changes by 50 to 100 miles, the Eastern seaboard should still feel the impact,” Finnis said.

Another potential factor is Sunday’s new moon with expected high tides in the New York metro area.

The combination of storm surge plus the expected high tides could spell some very difficult conditions, Finnis said.

Despite significant catastrophe losses this year, the property/casualty industry still has plenty of capital and the market has not made any broad adjustments thus far, said Finnis.

Willis believes the industry would need to experience a loss event of $15 billion to $20 billion to materially change the market for commercial customers.

Topics Claims