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Urbanization, power outages fueled hurricane losses

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Rapid urbanization and development was likely the key contributor to flood losses for Hurricane Harvey in Houston while extensive power outages fueled losses experienced in Florida from Hurricane Irma, according to AIR Worldwide.

The 2017 Atlantic hurricane season has been well above average and pre-season projections, with 15 named storms, 10 hurricanes and six major hurricanes about 80% of the way through the season, Eric Uhlhorn, principal scientist for the Boston-based catastrophe modeler, said during a webinar on Thursday. The hurricane season officially ends on Nov. 30.

Mr. Uhlhorn attributed the high activity to factors such as anomalously warm sea surface temperatures in the Tropical Atlantic Ocean and in the Gulf of Mexico and the lack of El Nino development, with the neutral conditions allowing for lower vertical wind shear across the Atlantic, which has allowed more hurricanes to develop and intensify. 

“It appears now in the short to medium term … that the general level of vertical shear across the Atlantic has increased,” he said. “I would expect that we don’t continue to see development at the same frequency that we’ve been seeing. We expect to see maybe a couple of more events develop, but we should be starting to wind down now, particularly in terms of impacts on the east coast.” 

AIR has estimated property losses from the flooding in Texas caused by Hurricane Harvey’s record-breaking rainfall at between $65 billion and $75 billion. The estimate does not include losses from Harvey’s winds or storm surge, which AIR has estimated at between $1.2 billion and $2.3 billion. 

“What Harvey will be most likely remembered for is the high flood risk in the Houston area in general,” said Karthik Ramanathan, AIR’s senior engineer in Boston. “Houston prides itself as a city of no limits. That’s probably what made the flooding from Harvey as bad as it was. There was rapid urbanization and development without any zoning laws in some of these areas, plus the stormwater drainage systems in some of these areas were underdesigned.” 

Harris County, Texas, where Houston is located, ranks third in National Flood Insurance Program payments from 1978 through July 31, 2017, he noted. 

“This speaks about the really high flood risk in Harris County and it ranks only behind Orleans and Jefferson Parishes in Louisiana,” Mr. Ramanathan said. “Orleans and Jefferson Parishes are ranked number one and two because of the heavy payouts that they received following Hurricane Katrina.” 

Meanwhile, AIR has estimated Hurricane Irma’s insured wind and storm surge loss at $24.5 billion to $35.6 billion.

“What stands out as a noteworthy aspect from Hurricane Irma was the magnitude and extent of power outage,” Mr. Ramanathan said, noting that 6.7 million were without power on Sept. 11, after the storm made landfall and several counties remained without power for an average of six days. “Think about what this would mean in terms of the business interruption loss to the commercial market in some of these areas, not to forget the additional living expenses that the residential properties have to wait out.”  

“Both these events are very much active in the sense that claims are still evolving and we believe that the losses will continue to develop over time,” he added. 

The recent storms have raised questions about the impacts of climate change on hurricane activity, Mr. Uhlhorn said.

“There are certainly some physical arguments based on what we’ve seen in terms of higher sea surface temperatures,” he said. “We know there is a relationship between higher sea surface temperatures and storm frequency and intensity.” 

“Certainly, one season or even five seasons does not really make an argument in favor of climate change impact,” Mr. Uhlhorn said of the counterarguments. “That’s particularly useful to keep in mind since we have actually seen a recent lull in activity. Although we’ve had a very active season in the Atlantic, overall (tropical cyclone) activity is quite a bit below average for what we see across the globe, particularly in the Western Pacific where the typhoon activity has been about half of what we typically see in a year.”