Hurricane Laura became the first major hurricane of this year’s hurricane season to make landfall in the United States on 27 August 2020. It made landfall as a Category 4 storm with wind speeds of up to 150 mph near Cameron, Louisiana, approximately 35 miles east of the Texas border. These catastrophic winds were accompanied by more than 9 feet of storm surge and heavy rainfall across the region. After landfall, Laura quickly started to weaken and it became a tropical depression by Thursday night local time as it crossed Arkansas and moved towards eastern Canada. While damage assessment from such an event takes time, initial insured losses have been estimated between USD 8-12bn. As most losses are expected to be retained by the insurance industry, this event is not expected to have any material impact on the ILS market.
Also on 27 August 2020, Typhoon Bavi made landfall over the North Hwanghae and South Hwanghae provinces in western North Korea, approximately 50km southwest of Pyongyang, with wind speeds equivalent to a Category 1 hurricane. It had weakened significantly since the previous day, when it had reached wind speeds equivalent to a Category 3 hurricane, and closely bypassed South Korea. This event is also not expected to have any impact on Insurance-Linked Securities.
In Europe, several parts of Switzerland and Austria are experiencing heavy rainfalls and localised flooding events. This is not unusual at this time of the year as the fall season is being progressed into. These events are not expected to have an impact on reinsurance or ILS markets given their overall small scale.
The California Wildfire season continues, with the lightning siege during August having caused over 840 wildfires from 14’000 lightning strikes as per the California Department of Forestry and Fire Protection. Currently, firefighters are battling approximately 20 active fires, with containment rates on many of these having improved over the past week thanks to lower temperatures and weaker winds. As there is still a long way to go in the California Wildfire season, Twelve continues to monitor this situation, in particular for any fires that could threaten densely populated regions of California.
As always, Twelve Capital continues to closely monitor any catastrophe events and will issue specific updates on any relevant new major events which occur.