I recently delivered a presentation at the New York Insurance Association’s (NYIA) 2013 annual conference, New York’s premier property and casualty insurance industry event, which was held in Lake Placid, New York during May 29th-31st.
The conference was attended by close to 200 senior officials including CEOs, CFOs, CROs of New York based insurance and reinsurance companies.
Points I covered included:
- Sandy is a unique storm but not the worst case scenario for the Northeast or New York.
- Sandy is one of very few storms that made landfall perpendicular to the Northeast’s coast. In general, storms in the Northeast have tracks going from southwest to northeast.
- Intense wind speeds exist on the right-hand side of the storm track in the hurricane wind field. Therefore, for a majority of historical storms the high winds are on the ocean side where there is no insured property exposure.
- If Sandy was to take the path of the 1938 New England hurricane, it could have been a significant storm surge event for Long Island, NY; Providence, RI and Narragansett Bay, RI.
- A storm with the 1938 New England hurricane strength on a path like Sandy could be a major windstorm event for the insurance industry in the Northeast. Property loss from the wind component of this hurricane scenario would be significant and could impact high value commercial buildings in the New York and New Jersey metro areas.
- Wind damage to buildings in the Northeast is relatively less understood than in Florida and other Gulf Coast states and there is less claims data available from historical events in the Northeast.
- It would be useful for effective catastrophe risk management to look at alternative scenarios that include: 1) Superstorm Sandy taking the 1938 storm path and 2) The 1938 New England hurricane taking the Sandy path (i.e. landfall perpendicular to the coast).
(Image credit: NASA)