August 30th, 2012

Update: Tropical Storm Isaac

Posted at 6:35 PM ET

isaac4smallTropical Storm Isaac now carries maximum sustained winds of 40 mph. It continues its slow drift, now to the north-northwest. Storm surge, inland flooding, and inland tornadoes remain as ongoing hazards with Isaac.

Isaac’s impacts are primarily flood-related, with some isolated wind impacts in part due to inland tornadoes. While the levee system of New Orleans was threatened, it largely remained intact. However the townships surrounding New Orleans were impacted by flood waters of 10-14 feet, where levees outside of the Federal improvement program were topped. In neighboring Mississippi, coastal regions experienced significant flooding, as waterways were unable to drain the excess rainwater into river basins inundated by storm surge.

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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 GC Analytics (SM) representative for assistance or go to www.i-axs.info for further information.

According to EQECAT, insured losses to onshore properties are expected to be between USD500 million and USD1.5 billion following Isaac’s landfall. Although no insured loss estimate is currently available to offshore exposures in the Gulf of Mexico, EQECAT says Isaac is likely to have caused a total economic loss of between USD500 million to USD1 billion to the energy sector in the Gulf. More loss estimates are expected before the end of the week according to news sources.

Storm Details and Forecast Factors

After weakening to a tropical depression this evening, the NHC expects a gradual turn towards the north into Friday following the edge of the subtropical ridge. Following this track, the remnant low should drift into Arkansas Friday, and then Missouri sometime Friday night. The storm should begin extratropical transition after 48 hours or so, and then fold into a pre-existing frontal boundary. The remnants should then be carried to the east or northeast next week into the Ohio Valley.

This is a slow-moving storm, and a very large one, and the storm or remnant low will bring excessive rain to many areas of the Mississippi and Ohio Valleys in the coming days.

Watches and Warnings

As of 15:00 UTC, (11AM EDT, 10AM CDT) Tropical Storm Warnings are in effect for the Mississippi-Alabama border to Morgan City, including Lake Pontchartrain and Lake Maurepas.

Hazards

Flooding. Excessive rainfall will pose an ongoing hazard well into the weekend, with estimated amounts between 7-14 inches, and locally higher amounts of 25 inches. Gretna, Louisiana has reported a rainfall total of 23.31 inches. Flash flood warnings are ongoing for many locations of the Gulf-coastal states. Coastal watersheds are presently unable to drain due to storm surge. Creeks in Mississippi will likely crest early Friday morning, and flooding is likely to worsen until then. Flood waters continue to rise in portions of coastal counties of Mississippi.

States affected in the next five days will include Louisiana, Mississippi, Alabama, Arkansas, Missouri, Illinois, Indiana, and Ohio.

Storm Surge. Surge levels of 6 and 5 feet are still reported from tidal gauges at Lake Pontchartrain and Waveland Mississippi, respectively. Depending on how surge levels phase with tidal cycles, surge levels could peak today at 4-8 feet along southeastern Louisiana and southern Mississippi, and 2-4 feet in Alabama. The storm surge is driven by Isaac’s size and history of slow movement. Water levels should begin to recede following high tide today, and as Isaac continues to slowly “move” inland.

Tornadoes. Inland tornadoes will be an ongoing threat today, and the threat will increase this morning according to the Storm Prediction Center (NOAA). Tornadoes have already been reported in southern Mississippi today, and a tornado watch remains active. Tornadoes will continue to be a threat as the storm moves further inland in the coming days.

Wind. Tropical storm force winds are occurring or are possible for all areas under a tropical storm warning. Tropical storm force winds still extend outward from the center up to 195 miles, but mainly near coastal and marine areas, and south-southeast of the storm center.

Impacts

Significant coastal and inland flooding is ongoing throughout the affected area. Floodwaters of 10-14 feet prompted evacuations and rescue of thousands in areas surrounding New Orleans as surge levels topped levees outside of recent Federal upgrades. Over 650,000 power outages were reported by Entergy across Texas, Louisiana, Mississippi and Arkansas. Numerous business and school closures were reported. Port traffic along many affected areas has been suspended under U.S. Coast Guard (USCG) orders, including Morgan City, New Orleans, and Mobile Bay.

News sources report that EQECAT estimates insured losses from Isaac could be as high as USD1.5 billion in and around Louisiana. Economic losses to the offshore Gulf oil sector are likely to range from USD500 million to USD1 billion, EQECAT added. More loss estimates are expected before the end of the week according to news sources. News sources also report that BP indicated onshore oil processing facilities in Port Fourchon and Houma, Louisiana, as well as in Pascagoula, MS, remain closed as of this morning.

Louisiana

The City of New Orleans, with its modified levee system, largely withstood the impacts of Isaac. Surge levels as high as 6 feet threatened to top the re-engineered levee system, but the system largely withstood the assault. Dusk to dawn curfews were imposed in New Orleans to curtail looting concerns. Reports of downed trees and power lines were numerous, along with power outages. At least 4,000 evacuees have sought refuge in emergency shelters.

Significant flooding occurred outside of the city however, in regions outside of the federal levee system. Surge levels up the Mississippi River topped one of the levees, leaving some townships under 10-14 feet of water. Houses were reported as washed away in certain neighborhoods. Significant evacuations of at least 3000 were necessary, and many had to be rescued. Many elderly and disabled had to be evacuated to higher ground. The Coast Guard, Louisiana National Guard and sheriff’s deputies worked to rescue people stranded in their homes. Lower Jefferson and Plaquemines parishes were heavily affected, with at least 800 homes flooded in Plaquemines Parish. No serious injuries were reported during the rescue effort. The Louisiana National Guard has scaled down rescue operations, although some as yet unidentified may still be in need of rescue. Authorities fear that at least 2,000 may still be trapped in their homes.

Power outages were reported to at least 700,000 households. Sugar cane fields have been flattened in rural areas. One fatality was reported during a rescue effort by a private citizen. Port traffic along the South Mississippi River has been temporarily suspended under USCG orders.

Mississippi

Numerous downed trees and power lines were reported, with power outages hitting at least 90,000 homes and businesses. In coastal Mississippi, officials used small motorboats Wednesday to rescue at least two dozen people from a flooded neighborhood in Pearlington. Reports of at least three tornadoes came from coastal counties. A tow truck driver was killed Thursday morning when a tree fell on his truck. Overnight curfews were imposed for coastal counties.

Many roads were impassable in rural and low-lying areas following the storm, and road closures were in effect due to downed trees and power lines. Interstate 59 in Pearl River County was covered by water 6 inches deep at the Wolf River, and waters were rising just before 7 a.m. Thursday. One coastal community near Biloxi was flooded and cut off from the mainland, and county officials rescued four people from flood waters overnight. Some wind damage has been reported including a mobile home roof in the Pine Grove community.

In Jackson County, rising waters drove dozens of people from their homes near Moss Point, and evacuations were necessary to rising flood waters near Pascagoula, Moss Point, and Escatawpa. At least two homes were damaged in areas under tornado warnings, but with no injury reports.

The Electrical Power Association of Mississippi had at least 79,500 customers without power, mostly in coastal and southwestern counties. Mississippi Power Co. was reporting about 10,000 customers without power, with the majority of those outages being reported in Harrison County.

Oil and Natural Gas Impacts

Oil and natural gas damage surveys were under way for natural gas and oil facilities today, and sources indicate that personnel would return following flyover inspections (assuming no damage). Undamaged facilities are likely to be brought on line following standard safety inspections. Damaged stations will be brought back on line as soon as practical. Inspections and re-deployment of staff normally can take several days, with staff returning to platforms as early as Friday.

As of mid-day Wednesday, offshore interests reported estimates of 71.64 percent of daily natural gas production, and 94.72 percent of daily oil output was disrupted in affected areas. 84.73 percent of total platforms in the Gulf of Mexico had been evacuated. Sources also report that BP indicated onshore oil processing facilities in Port Fourchon and Houma, Louisiana, as well as in Pascagoula, MS, remain closed as of this morning.

Source: National Hurricane Center (NOAA), Storm Prediction Center (NOAA), National Weather Service (NOAA), Associated Press, Agence France, Reuters, Intelligence Press Inc., and P.G. Publishing Co. Inc.

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Guy Carpenter publishes 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.

Guy Carpenter compiles 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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