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KCC pegs 2020 Atlantic hurricane season losses near $22bn

Insured losses during the 2020 Atlantic hurricane season will likely amount to nearly $22bn based on current property values, a small figure considering the record-breaking frequency of storms that made landfall, according to a new report by modelling agency Karen Clark and Company (KCC).

The white paper released on Tuesday said the 30 tropical cyclones that formed in the Atlantic Basin last year made the season “unprecedented” in terms of frequency, but not in terms of severity.

KCC’s loss estimate included privately insured wind and coastal flood losses to residential, commercial and industrial properties, as well as automobiles, but excluded losses covered by the National Flood Insurance Program.

Over the course of the year, 12 storms became named events and made landfall in the US, breaking the previous record of nine set in 1916, while six storms became landfalling hurricanes, tying the previous record set in 1985, KCC said.

However, only one major hurricane made landfall – Hurricane Laura – which brought winds of up to 150 mph to Louisiana, making it the most intense hurricane to make landfall in that state in over 150 years, and the most damaging storm of the season with insured losses estimated at $9bn, the agency said.

Tropical Storm Isaias, on the other hand, failed to reach hurricane status, but due to its impacts over a dozen separate US states, the system tied for second place with Hurricane Zeta in terms of insured losses at roughly $4bn, KCC said.

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Overall, nearly half of all estimated losses occurred in Louisiana, which was impacted by five storms. The next largest losses were forecast in Florida, Alabama, New Jersey and Texas, which combined made up roughly 25% of US nationwide losses.

“Losses are driven by location as well as severity, and no landfalling hurricanes impacted major metropolitan areas,” the agency wrote.

“Due to the frequency and location of landfalling storms, every coastal state experienced insured losses,” KCC said.

Despite having lower wind speeds than Hurricane Katrina, which hit New Orleans as a Category 3 storm in 2005, losses from Hurricane Laura were smaller than other major hurricanes in large part due to the relatively low population density in the impacted region, the agency said.

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Looking back, a total of 10 storms rapidly intensified in the 2020 hurricane season, which was a particularly notable trend related to climate change, KCC said.

“In recent years, rapid intensification has been observed with more frequency and is more closely related to sea surface temperatures and climate change. Warmer ocean temperatures allow hurricanes to quickly and sometimes unexpectedly intensify,” the agency said.

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