Catastrophe risk modeling firm AIR Worldwide estimates that insurable losses (losses from properties that are eligible for insurance, whether or not they are actually insured) from Hurricane Alex are not expected to exceed $200 million.
AIR explained that since “insurance penetration in Mexico is relatively low, insured losses are not expected to be significant. This loss estimate covers possible wind and flood damage to onshore properties in Mexico and is based on the available meteorological parameters and the forecast track for Hurricane Alex since it made landfall in northeast Mexico Wednesday night.”
Dr. Tim Doggett, principal scientist at AIR Worldwide, noted that “Hurricane Dolly in 2008, which also reached Category 2 intensity, was the most recent hurricane to make landfall close to Hurricane Alex’s path. The last hurricane to form in the Atlantic basin in the month of June was Hurricane Allison, 15 years ago, in 1995. That year saw 19 named storms, 11 hurricanes, and five major hurricanes—a season very similar to that predicted for 2010. Alex also has been the strongest hurricane to form in the Atlantic basin in June since 1966.”
He added: “Alex will continue moving inland over northeastern Mexico throughout the day and is expected to weaken more rapidly as it approaches the very high and rugged terrain of the Sierra Madre Oriental Mountains.
“While Alex made landfall as a more intense storm than was expected, because of the relatively low population in the area and the small size of Alex’s radius of maximum winds, Alex’s overall impact in terms of wind damage will be less than anticipated.” The NHC expects Alex to weaken to a tropical depression later today and then dissipate within the next 24 to 36 hours. However, heavy rain is expected to continue.
AIR pointed out that “At landfall, Alex struck Mexico’s northern Tamaulipas state with 100 mph-winds (161 km/hr) and a torrent of rain, ripping off roofs and flooding streets in the coastal fishing villages of the area. Alex already has produced rainfall accumulations greater than 12 inches (30 centimeters), and some isolated extreme amounts in excess of 20 inches (51 cm) are likely as remnants of Alex move into more mountainous terrain.”
“Insured residential properties in Mexico overwhelmingly are of confined masonry construction, while insured commercial properties are dominated by confined masonry and reinforced masonry construction,” said Dr. Doggett. “Both construction types should fare well against Alex’s wind speeds. Additionally, the area of Alex’s landfall and inland track is sparsely populated. Structural damage, therefore, is expected to be minimal. In total, given that insurance penetration in Mexico is relatively low, the resulting insured losses are not expected to be significant. The full extent and possible effects of expected flooding, however, remain uncertain.”
Parts of southern Texas were hit by tropical storm-force winds (including gusts of up to 65 mph [105 km/hr]) when Alex came ashore, but heavy rain has had the chief impact. Gulf of Mexico offshore oil and gas production have been disrupted and cleanup efforts of the oil spill, 600 miles away, have been hampered as well.
Source: AIR Worldwide
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