Felix Weakens; RMS Puts Losses at Less than $200 Million

Hurricane Felix has been downgraded by Miami’s National Hurricane Center to a tropical depression as it crosses Central America. The storm left at least four people dead in Nicaragua, as it tore the roofs off houses and downed trees across the region. Although the winds have subsided the NHC warned that heavy rains “will likely produce life-threatening flash floods and mud slides.”

Risk Management Solutions issued a preliminary estimate of insured losses from Felix, indicating that they “are likely to be minimal, at less than $200 million.” RMS added: “Despite being a maximum-strength storm, the small population combined with relative poverty and low insurance penetration in the area means the economic loss will be low, though the humanitarian cost will be high.”

Floods and landslides, triggered by the heavy rainfall, are expected to cause most of the damage. RMS said the losses would be less than the damage caused by Hurricane Mitch, which, it notes “made landfall slightly further north as a Category five storm in October 1998. Unlike Felix, which is moving fairly quickly, Mitch stalled off the Honduras coast and led to six days of torrential rain. Due to the severe damage to agriculture and infrastructure, the economic losses from Mitch were around $5 billion, while insured losses were estimated to be no more than $300 million.”

Source: NHC, RMS, news reports