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Super Typhoon had wind speeds faster than Katrina

Posted in Industry News on November 11, 2013.

Publication Date:  11/11/2013
Source:  Advisen News

Despite wind speeds greater than Hurricane Katrina, insured damages form Typhoon Haiyan, or Yolanda in the Philippines, won’t be anything close to those experienced at the hands of the 2005 Atlantic Tropical storm and cyclone.

EQECAT manager Aarti Dinesh cited low insurance penetration rates in the Philippines for the insured loss differential.

“Katrina had wind speeds of 125 mph,” Dinesh, product manager for global tropical cyclone models at catastrophe modeling company EQECAT, told Advisen on November 10.

In comparison, wind speeds for Haiyan clocked in at an incredible 190 mph, she observed. The super storm fluctuated between at “Category 4 and Category 5” event as it traversed across the Philippine Islands, she added.

The typhoon killed at least 10,000 people in the central Philippines, according to one senior police official commenting on November 10.

Damages are likely to be most pronounced in the small coastal towns of Tacloban and Leyte, which have a population of close to 200,000 between them, said Dinesh.

Nevertheless, she said, “Only about 15 percent to 20 percent of all property insurance policies are insured against typhoon risk in the Philippines.”

Also, EQECAT observes, typical insurance policies in the Philippines do not include flood coverage following a typhoon, unless a separate policy is purchased with a name peril extension.

Also on November 10, Bloomberg reported that the monster storm’s total economic impact might reach $14 billion, with insured damages likely to reach nearly $2 billion.

That report cited catastrophic risk forecasting and assessment firm Kinetic Analysis Corp. of Silver Spring, MD as its source.

Dinesh said she was unable to comment on another firm’s insured damage assessment.

But she pointed out that the area in question is not populated with high-value properties.

The Visyan Island region in question is mostly an agrarian community of farms and fisheries, said Dinesh.

“The economic development of this region is not as organized as the metropolitan Manila region,” she said, and the building codes are not as good as in the nation’s capital.

“There’s been a lot of damage to homes, property and infrastructure” at the hands of Typhoon Haiyan, said the EQECAT executive. “Unfortunately, a lot of these are not insured.”

This was also a swiftly moving storm that had weakened substantially by late afternoon on Nov. 10. At that point, Haiyan was only a Category 1 storm.

“I only know it was devastating in the amount of human life lost,” added Dave Marcus, South Florida area chairman and managing director at Arthur J Gallagher’s public sector unit. “I do not expect that it will have any real impact on the worldwide CAT Property marketplace,” however, he told Advisen.

By Janet Aschkenasy (jaschkenasy@advisen.com)

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