Record-setting Category 5 landfall surprises scientists and challenges engineers about structural performance
Hurricane Dorian’s devastating impact on The Bahamas in 2019 was nothing like the Caribbean insurance market had ever experienced. While the geographical extent of this Category 5 event was limited mainly to the islands of Abaco and Grand Bahamas, the record-setting landfall intensity and highly unusual storm path and trajectory – in combination with its extensive damage footprint – was so shocking that it reignited debate on whether the Saffir-Simpson Hurricane Wind Scale should be amended to add further categorization that would include such upper-echelon events.
Moreover, following the lower intensity yet far more devastating insured losses from Irma and Maria’s “September Double Whammy” of 2017, many questioned the impact on re/insurer appetite and rates going forward.
Once the challenging recovery had started, the unique circumstances of Dorian started to come to light. After such a calamitous storm, it is normal for Caribbean property and casualty insurance professionals to instinctively ask themselves about the normal recurrence of such a hurricane. Estimates vary with international reinsurers vindicating much shorter return periods than those interpreted by local Caribbean insurers to support higher catastrophe rates at the following renewal.
Previous Category 5 storms have been in the three-digit range, i.e. 150 years, 250 years, etc. However, Dorian was the longest-stalling Category 5 hurricane since 1851 (when record keeping began). It maintained peak intensity for nearly 12 hours while impacting the two islands and stayed at Category 5 intensity for nearly 30 hours. Such storm behavior differentiates Dorian as an extreme tail storm associated with a recurrence that goes well into the four-digit or possibly five-digit return period realm.
The Bahamas has some of the strongest wind building codes in the Caribbean which are on par with those of Southern Florida, allowing structures to withstand sustained winds in the 165 mph to 185 mph range. Under such stringent standards, there is a confidence that Category 5 storms will behave as they have historically with high-level sustained winds being short-term events that eventually subside over areas like Grand Bahamas and Abaco. This is due to either the storm continuing to move along its trajected path or due to the natural slowing of winds caused by friction when landfall is made.
With neither of these natural phenomena occurring during Dorian, the likelihood of seeing a repeat event like this again in our lifetimes is likely very low. As such, unlike the effects of Irma and Maria, Dorian is not a similar-case event where insurers or reinsurers should question changing their view of hurricane risk in the Caribbean.
This is an extract from: Weather, Climate & Catastrophe Insight Report: 2019. To access the full report, please click here.
About the Author
Paul Cutbush is Head of Catastrophe Management for Canada and the Caribbean at Aon's Reinsurance Solutions business. He has over 20 years’ experience in underwriting and leading global catastrophe programs; first as an underwriter in Gerling Group, then as a broker at Swiss Re and then at Munich Re Group, and he joined Aon in 2012. Paul is active in the market as Chair of the Reinsurance Research Committee, a member of The Institute for Catastrophic Loss Reduction’s Insurance Advisory Committee and Earthquake Subcommittee, the Insurance Bureau of Canada’s Flood Technical Advisory Group, and CatIQ Loss Index’s Advisory Committee. He regularly shares his reinsurance and catastrophe expertise with professional associations including The Insurance Institute of Canada, The Insurance Association of the Caribbean, The Society of Fellows and CatIQ’s Canadian Catastrophe Conference. Paul is a Chartered Insurance Professional, holds a Bachelor of Arts Degree and a Certificat de français pratique from Western University in London, Ontario.