Guy Carpenter's Instrat unit has issued reports about last year's notable global tropical cyclone activity as well as 2008 man-made and technical catastrophes.
Appropriately titled, "2008 Tropical Cyclone Review," the first report summarizes last year's cyclonic activity while including estimates of economic and insured losses sustained from each of the more significant cyclones after landfall. Instrat asserts that the 2008 season displayed an "above-average" level of activity, as 16 tropical storms formed in the North Atlantic. This represents a 65 percent increase compared to the period from 1950 to 2007, which averaged at 9.7 tropical storms. In fact, eight of the 16 named storms in 2008 developed into hurricanes, and five of those became major hurricanes, meaning they registered a Category 3 strength or higher on the Saffir-Simpson scale.
According to Guy Carpenter, 2008 was the fourth most severe hurricane season since reliable records have been available. For the first time on record, six consecutive tropical cyclones -- Dolly, Edouard, Fay, Gustav, Hanna, and Ike -- made landfall on the U.S. mainland. Additionally, a record three major hurricanes -- Gustav, Ike, and Paloma -- struck Cuba.
The team went on to mention that this was also the first Atlantic season to have a major hurricane form in five consecutive months, referring to Bertha in July; Gustav in August; Ike in September; Omar in October; and Paloma in November. The period also witnessed the first tropical cyclone ever to make four landfalls in one state -- Hurricane Fay crisscrossing Florida.
Hurricane Ike's impact seemed to surprise the major modeling firms, as its magnitude was dramatically larger than their initial expectations. This discrepancy has reportedly generated vastly different loss estimates that have yet to be resolved. Early indications for 2009 suggest another above-average tropical cyclone year.
In its "Man-Made Cats Hit $7 Billion in 2008" report, Guy Carpenter assesses the man-made and technological catastrophes. Last year's total estimated insured losses from such causes were about 46 percent higher than the annual average of $4.8 billion, according to data from Swiss Re. Nineteen known events resulted in insured losses of more than $50 million each, according to publicly available information. These events occurred in 11 countries, with losses ranging from $80 million to nearly $2 billion.
Nearly half of 2008's man-made catastrophe losses were caused by two events: an explosion and fire at an Apache Energy offshore gas plant ($1.8 billion) and BHP Billiton's business interruption losses ($1.5 billion), both of which occurred in Australia. Two events in the United States caused losses of more than $400 million, and the terror attack in Mumbai, India, could trigger a staggering $600 million in insurance claims.
Risk losses in the mining, energy, and steel industry were particularly large as well, said Guy Carpenter, adding that claims were exacerbated by the impact of record high commodity prices on business interruption cover. Apache Energy's offshore gas plant explosion and fire -- on Varanus Island in Western Australia -- interrupted the supply to one of the world's most significant mining areas. This reduced the supply of natural gas to the region by 30 percent, which was a major factor in pushing the incident's insured losses to nearly $2 billion.
Both reports are available online and can be viewed here.
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