July 2nd, 2010

Update: Hurricane Alex

Posted at 9:13 AM ET

alex-5-smallHurricane Alex made landfall near Soto La Marina and La Pesca in Mexico’s Tamaulipas State at around 02:00 UTC on July 1 (22:00 on June 30 local time) with sustained winds of around 105 mph (165 kmph), equivalent to a category 2 hurricane, according to the National Hurricane Center (NHC). The NHC said Alex was the first hurricane to reach category 2 status in June in the Atlantic since Hurricane Alma in 1966. At landfall, the NHC said hurricane-force winds extended 70 miles (110 kilometers) from the center of the storm while tropical storm-force winds extended 205 miles (335 kilometers), the NHC said. Early estimates of insured losses suggest the insurance industry could payout between USD100 million and USD200 million for the damage caused by Alex.

According to AIR Worldwide, insured losses from Alex are not expected to exceed USD200 million. AIR said an estimated USD200 million of insurable property was located in the storm’s path, but low take up rates in the sparsely populated landfall region will limit insured losses and the impact on the insurance industry is not expected to be significant. EQECAT, meanwhile, said insured losses from Alex are not expected to top USD100 million.


Hazard data illustrated in the CAT-i map was taken from i-aXs®, Guy Carpenter’s web-based risk management platform. i-aXs users can view impacted areas on any map as well as see how their portfolios were affected. Please contact your broker or Instrat® representative for assistance or go to www.i-axs.info for further information.

The NHC said Alex made landfall around 115 miles (185 kilometers) south of the Texas/Mexico border, along a sparsely populated coastline of Tamaulipas State. U.S. President Barack Obama declared a state of emergency in Texas on June 29 and Texas Governor Rick Perry issued his own state disaster proclamation for 19 counties. Parts of southern Texas were hit by tropical storm-force winds as Alex came ashore (gusts of up to 65 mph were recorded in places). Heavy rain also fell in the area but no major damage was reported. In Brownsville, officials said at least 40 streets were flooded and as many as six tornadoes were reported in the area, downing trees and power lines and cutting power to about 4,000 households. Officials in Cameron and Hidalgo counties added that some 1,000 people in southern Texas sheltered in evacuation centers. Further afield, reports said heavy rain and thunderstorms associated with the outer bands of Alex affected the entire Gulf Coast from Texas to Louisiana and the Florida Panhandle.

More significant damage and disruption was reported in northeastern Mexico as Alex’s strong winds and heavy rain ripped off roofs, uprooted trees, flooded streets and killed two people in Monterrey. Monterrey was patricianly badly hit as floodwaters paralysed the city and damaged houses and vehicles. Officials said around 16 inches (400 millimeters) of rain fell in some areas of northeast Mexico. Power and telephone service were down in several towns and cities, including Ciudad Victoria where almost all 250,000 inhabitants suffered water and power cuts. Elsewhere, reports said the heavy rain flooded half of the Mexican border city of Matamoros (population of 450,000 people) and more than 5,000 people living in Tamaulipas State fled inland to take refuge in storm shelters. Officials said around 1,500 people evacuated to shelters in Matamoros after 14 inches (355 millimeters) of rain triggered flash floods and caused some damage. Elsewhere, all 2,000 inhabitants in the fishing town of La Carbonera, located just to the north of the storm’s landfall point, were evacuated.

Prior to Alex making landfall, the NHC warned waves up to 5 feet (1.5 meters) above ground level were expected along the immediate coast near and to the north of where the center of the storm made landfall. Although Alex avoided the BP oil spill off the Louisiana coast, reports said the storm still generated high seas in the region. BP consequently announced that plans to increase the amount of oil being captured from the well could be delayed by up to a week. Controlled burns of crude on the surface, flights spraying dispersant chemicals and booming operations were also halted, officials said. Reports also said the high waves pushed more of the huge slick onto fragile shorelines.

Although, Alex missed much of the major oil drilling sites in the Gulf of Mexico, Shell Oil and Marathon Oil said production was shutdown at some of their platforms near Alex’s path. Shell, Marathon, Exxon Mobil, Anadarko Petroleum and Apache also evacuated non-essential workers from platforms and rigs in region. US officials said about 26 percent of oil production and 14 percent of natural gas output in the Gulf of Mexico was shut on July 1. The Mexican ports of Dos Bocas and Cayo Arcas, which handle 80 pecent of all the country’s export shipping in the Gulf of Mexico, were also closed due to bad weather and strong surf in the area.

Sources: National Hurricane Center, WSI, Associated Press, Reuters News, Agence France Presse

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Guy Carpenter’s Instrat® department provides CAT-i reports for major natural catastrophes worldwide. These reports cover catastrophes including worldwide tropical cyclones, earthquakes, major UK and European floods and any other natural event that is likely to incur a significant loss to the (re)insurance industry. Please email CAT.i@guycarp.com if you wish to be added to the free email distribution list.

Instrat also provides RISK-i reports for major technological or man-made events worldwide. These reports cover risks to property, transport and life including explosions, fires, crashes, engineering disasters and terrorist attacks that are likely to incur a significant loss to the (re)insurance industry. Please email RISK.i@guycarp.com if you wish to be added to the free email distribution list.

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