Hurricane Sandy poses a significant threat to the Atlantic Coast from North Carolina to Newfoundland this weekend into next week. The interaction of Sandy with a cold frontal system will lead to a historic “nor-easter” type cyclone. Threats include storm surge, tropical storm or hurricane force winds, and excessive rainfall. Power outages, coastal damage, with downed trees and power lines are possible over a very large area from North Carolina to Nova Scotia. The exact track is still very uncertain, and interests along the entire Atlantic East Coast should closely monitor the progress of this system.

For the immediate term, Hurricane Sandy is now a category-2 hurricane on the Saffir-Simpson Scale, with winds of 105 mph. Sandy has left Cuba and is approaching the Bahamas, and impacts will also be felt along the Florida Atlantic Coast. Hurricane warnings have been posted for much of the Bahamas, and tropical storm warnings for portions of Florida.

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®   representative for assistance or go to www.i-axs.info for further information.

Forecast

Short Term

Sandy is currently approaching the Bahamas, with 105 mph winds, as a category-2 hurricane on the Saffir-Simpson Scale. Sandy should begin to experience increasing wind shear and cooler waters over the longer term, causing some weakening.

Sandy is expected to slow on a gradual northward track, before moving to the north-northwest on Friday, and then curve to the north-northeast into the weekend. Sandy should gradually weaken to a category-1 hurricane during this period, while transitioning from a hurricane into a power post-tropical storm.

Long Term

From Sunday night into next week, the forecast becomes much more complicated, with a high degree of uncertainty. Factors affecting the forecast include Sandy, the subtropical ridge, and a strong frontal system expected to reach the U.S. east coast this weekend. The exact interaction between these features cannot yet be precisely determined. For this reason, the precise track and intensity of Sandy still carries great uncertainty.

The strong boundary between tropical air and polar air along the frontal boundary, combined with moist tropical air of Sandy, will cause aggressive development of a powerful post-tropical cyclone, very similar to a “nor-easter.” The storm could move inland anywhere from North Carolina to Newfoundland, but impacts will be felt over a very large area, and well-away from the center of circulation. Strong tropical storm force or weak hurricane force winds will be a possibility for a long period of time.

Potential Hazards and Impacts

Impacts will most likely include storm surge with large and destructive waves, affecting coastal regions over a large area. Tropical storm or hurricane force winds are also possible along large swaths of the mid and north Atlantic coast. Excessive rainfall could also trigger inland flooding, particularly if waterways are inundated by storm surge.

Severe coastal flooding, coastal damage, wind damage, inland flooding, downed trees, downed power lines and power outages are all possible over a very large area. Major airports could face runway restrictions or closures under excessive weather.

Historical Context

Such a combination of meteorological factors is very rare, but it appears that this scenario will actually unfold. The most recent historical event remotely comparable to this potential scenario is the “perfect storm” of October 1991, which made landfall in Nova Scotia as the equivalent of a weak tropical storm.

Interests along the U.S. east coast should closely monitor the progress of this feature in the coming days, and prepare to implement response plans should it become necessary. Interests between Delaware and Massachusetts may especially want to prepare for the possible hazards under this event.

Interests in Florida and the Bahamas are of course facing a far more imminent threat.

Watches and Warnings

• Hurricane Warnings

                    Bahamas to the Ragged Islands

• Tropical Storm Warnings

                   Florida Coast from Ocean Reef to Flagler Beach

                   Lake Okeechobee

                   Southeast Bahamas

• Tropical Storm Watch

                   Florida Coast from Flagler Beach to Fernandina Beach

                   Florida Keys from Ocean Reef to Craig Key

                   Florida Bay

Immediate Hazards

Hurricane and tropical storm force winds extend outward from the center to 30 and 140 miles (45 and 220 km), respectively.

• Florida Coast, Florida Keys, Florida Bay

                  Tropical storm conditions tonight through Friday

                  1-3 inches of rain

                  Storm surge 1-2 feet

• Jamaica

                  Water levels should begin to subside, with improving conditions

• Haiti/Dominican Republic

                  6-12 inches of rain, with isolated amounts to 20 inches

                  Life threatening flash floods and mudslides

• Eastern Cuba

                  Water levels should begin to subside, with improving conditions

• Bahamas

                  Hurricane conditions for central and northwestern Bahamas today through Friday

                  3-6 inches of rain, with isolated amounts to 12 inches

                  Storm surge 5-8 feet

Impacts

Jamaica

Reports of widespread power outages, flooding, one fatality, and home damages.

Cuba

Extensive coastal flooding, with evacuations of at least 55,000 were reported. 29-foot waves and a six-foot storm surge were reported. Roof damage was widely reported. Damages to hotels near Santiago were also reported.

Sources: National Hurricane Center (NOAA), Storm Prediction Center (NOAA), National Weather Service (NOAA), Hydrometeorological Prediction Center (HPC/NCEP/NOAA), Associated Press, Reuters, Agence France Presse.

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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.