AIR Estimates Mexico Insured Losses from Karl at $102-$206 Million

September 24, 2010

According to catastrophe modeling firm AIR Worldwide, Hurricane Karl, which made its second landfall in Mexico last Friday as a Category 3 storm on the Saffir-Simpson Wind Scale, has caused several rivers and canals to overflow, inundating large portions of the state of Veracruz.

AIR estimated that “insured losses from this event are in the range of 1,300 million Mexican Pesos ($102 million to 2,600 million Mexican Pesos ($206 million). AIR said the estimate “covers possible insured wind and flood damage to onshore properties in Mexico.”

AIR also concluded that while economic losses are “likely to be significant, insurance penetration in Mexico is relatively low, so insured damage from Hurricane Karl is expected to be much lower. ”

Dr. Tim Doggett, AIR’s principal scientist, added: “As Karl was a small storm with hurricane force winds extending outward only 25 miles, the damaging wind footprint was limited mainly to Veracruz and the flood footprint extended only 50 to 75 miles inland.

“Mexico has experienced one of the wettest seasons on record, with widespread flooding in February from unseasonal torrential rains, flooding in the northern states from the remnants of Hurricane Alex in July, and weeks of heavy rain affecting large portions of southern and eastern states earlier this month. In the state of Veracruz, more than 100,000 people from low lying areas were already flooded out of their homes prior to the arrival of Karl.”

AIR also noted that official in the Mexican State of Veracruz “estimate that half a million residents have been directly affected by the floods, and especially hard hit are the cities of Boca del Río, Cotaxtla, Carranza, Jamapa, and Medellín. Officials from the state of Oaxaca, just south of Veracruz, have reported 2000 flooded homes in their state. An estimated half a million hectares of cropland has been damaged.”

Source: AIR Worldwide

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