Four for Four Hurricane Landfalls
Late yesterday afternoon, Francine was upgraded to a hurricane and is currently located 150 miles southwest of Morgan City, LA. Outer bands have impacted Louisiana since yesterday, adding to saturated soil conditions. Francine has sustained winds of around 90 mph. The storm is moving north-northeast at about 13 mph, and Francine will accelerate northeast in the next 6 hour landfall at 7 pm tonight.
This means the 2024 hurricane season is just hours away from going six-for-six in terms of named storms impacting land and four-for-four, with all four hurricanes making landfall either along the U.S. Coastline or in the Caribbean / Bermuda. Three of the four hurricanes have made U.S. landfall, which is the most U.S. hurricane landfalls we have experienced since 2020, when six hurricanes made U.S. landfall. Although every hurricane that makes landfall can leave its legacy, as highlighted in our BMS Tropical updates, Louisiana has had its fair share of impacts since 2020. Overnight, Francine continued to strengthen, and forecast models have come into agreement on a landfall near Burns Point Park near Morgan City, LA, this evening.
Remember that there is still a small window for intensification before landfall, and the National Hurricane Center suggests Francine could reach a low-end Category 2 status today prior to landfall. However, they are a few knots in intensity higher than most model guidance. Currently, Francine is only 3 mph away from Category 2 status. South-westerly shear is expected to increase over the hurricane later today, and interaction with an upper trough should cause drier air to wrap around the southern portion of Francine as it nears the coast. There is also colder water along the coastline due to recent heavy rains. All these factors are negative impacts, meaning the hurricane is not expected to continue strengthening through landfall like some of the more recent U.S. hurricane landfalls. These negative factors will also impact the overall structure. Therefore, do not expect a picture-perfect depiction of a hurricane on radar or satellite images upon landfall later today. In fact, Francine might turn out to be what is called a “halfacane,” where one half of the hurricane is stronger than the other half.
Francine will bring a surge of 5-10 feet, rain of 4-8 inches, and wind impacts (80 mph wind gusts) to the immediate landfall areas along the Gulf Coast. Still, this will be nothing like recent storms and should be a manageable event for the insurance industry.
Wind Impacts
With Francine as a solid Category 1 intensity, wind impacts in southern Louisiana will be locally significant in the areas that receive the hurricane’s eyewall, yet manageable due to building codes and recent storms that should have wiped out any non-resilient structures. Shear will likely tilt the strongest winds into Francine’s northeastern eyewall, so we can expect the wind field to be lopsided. The biggest concern may be the saturated soil conditions, which could cause tree fall across the region. As a result, the surrounding area may experience higher than expected power outages.
Below is the latest BMS iVison Verisk wind swath showing the detailed nature of wind with surface roughness. It shows the New Orleans area could encounter wind gusts of 70 mph higher gusts along the shores of some of the open bodies of water like Lake Pontchartrain. However, Baton Rough and Borgan city will be on the weaker side of the Francine track resulting in lower wind speeds.
Storm Surge Flooding Risk
Given the low swampy land of much of the Louisiana coast, flooding and storm surge are always a concern. Still, this area is used to flooding, and protective measures should limit any damage as the protection system should be able to withstand the storm surge and heavy rains. Nonetheless, the area has very saturated soil, which could lead to an elevation of localized flooding in some areas. The best source for detailed storm surge inundation level is the NHC Potential Storm Surge Flooding Map
Tornado Risk
A few brief, isolated tornadoes cannot be ruled out across the region; SPC has defined a "slight risk" (level 2/5) of severe thunderstorms for coastal sections of Alabama, Florida, and Mississippi late today and tonight. Much of this area has a 5% chance of a tornado occurring within 25 miles of a location. It is worth noting that tornadoes associated with tropical systems are usually low-topped and short-lived. This makes it very difficult to provide a warning with a long lead time and to make precise damage assessments.
Insurance Industry Impacts
As yesterday's BMS tropical update highlighted, Louisiana has been no stranger to named storms since 2020. Ten insurance-level impacts have resulted in over a million claims across personal, commercial, and auto lines of business. This means that many structures have been repaired, and likely, many new roofs have been replaced along coastal sections of the state. If a roof had not been damaged and replaced in recent storms, many policyholders might have been forced to get a new roofs due to market pressures.
This is great news. If carriers have adopted policies to assess risks for roofs older than 10 years, they are following the latest IBHS research, which identifies this as a best practice for reducing future wind and hail losses. The report mainly focuses on asphalt shingles and highlights that their vulnerability to high winds increases with age. According to the research, once an asphalt shingle roof is 10 years or older, it has a 75% chance of visible damage when wind gusts reach 110 mph.
Additionally, according to the newest IBHS Rate The States Report, Louisiana has moved up from a score of 82 to 91, which is one of the largest improvements of any of the hurricane states. It currently ranks as the #5 best hurricane state. As mentioned yesterday, The Louisiana Fortify Homes grant program launched in November 2023 provides grants of up to $10,000 to help homeowners upgrade their roofs to the FORTIFIED Roof standard. The grant program also allows homeowners who recently completed roof replacements due to storm damage to use funds to meet other FORTIFIED standards.
Below is a comparison of the Zeta and Ida and the associated BMS iVision Verisk Respond 3-second wind swath that have impacted the greater New Orleans and Baton Rouge area. Also included is the Francine wind swath for comparison, which, as expected, is much weaker over much of the areas that Zeta and Ida impacted. Therefore, any damage likely done during these two strong storms would be fine in Francine's lesser wind speeds.
By looking at past hurricanes like Hilda in 1964, a Category 2 storm, along with more recent events like Zeta and Ida, we can get a reasonable sense of potential insurance losses. Zeta, which made landfall with 110 mph winds, passed just south of the New Orleans area. However, there was a significant wind gradient across the metro. For example, New Orleans Lakefront Airport recorded a gust of 53 mph, while Bayou Bienvenue, just a few miles south, saw gusts of 102 mph, demonstrating that the areas with the highest exposure experienced weaker winds. This major hurricane only caused under $1B in losses in the Louisiana insurance industry. Of course, Ida was a major event to the area in 2021 and cannot be used as a comparison given its major impacts, which were well over $21B for the state. This is not an Ida event. According to the catastrophe risk models, the losses would be around $800M if Hilda (1964) were to occur today. In looking at other stochastic events from the various catastrophic risk models, Louisiana's losses should be under $2B. Hopefully, the communities are much more resilient given all the recent named storm activity. Overall, this, like Beryl and Danny earlier this year, is unlikely to become a reinsurance event. It will likely result in retained losses for carriers or even a protection gap event for policyholders, especially given the higher percentage deductibles that have become common in the area’s policies. Regardless, this will be a great test of all the changes that have occurred in the insurance industry in the areas since 2020, making loss estimation a bit of an unknown as it is a bit of uncharted territory.
Yesterday was the peak of the season. And though it may seem like the peak has passed, Hilda's October 3rd landfall in 1964 reminds us that anything is possible in the weeks ahead. Long-range models also indicate increased activity across the Atlantic Basin in the coming weeks. Some of this activity could potentially impact the insurance industry along the U.S. coastline, with the next area of concern being off the Carolina coast next week, and possibly another system emerging from the Gulf of Mexico in the coming weeks. However, these are just areas to monitor, as current probabilities remain low.