A risk modeling firm reduced its Hurricane Dennis maximum damage estimate by $2 billion, as experts said today that the next oncoming hurricane stands a good chance of striking Mexico by early next week but will likely miss the U.S. mainland.
Risk Management Solutions, a risk modeling firm based in Newark, Calif., lowered its insured loss estimate from Hurricane Dennis to between $1 billion and $3 billion. Shortly after Dennis struck on Sunday, RMS issued a loss estimate range from $1 billion to $5 billion.
It said its new estimate was based on observations from its field team and additional data on the storm's wind-field.
RMS also said damage estimates for the Caribbean and Gulf of Mexico offshore oil fields will total less than $500 million.
Although Dennis took a track similar to Hurricane Ivan last year, which produced more than an estimated $7 billion in insured damage, the storm was smaller and moved through more quickly.
Bud Trice, vice president of catastrophic services for Crawford & Company, a claims management firm based in Atlanta, said that reports of claims are coming in slowly from Florida, which was worst hit by Dennis.
Some insurers have reduced the number of adjusters they need, Mr. Trice said.
In some cases, claims reporting is delayed because policyholders have not been able to get back into their homes, Mr. Trice observed, but there also appears to be much less damage than insurers thought there would be when Dennis was a storm ranked as a Category 4 on the five-point Saffir-Simpson scale.
Dennis diminished in strength to a Category 3 storm, with sustained winds of 120 mph before striking the mainland. Higher deductibles are also a factor in the reporting, he noted, with some not reporting claims because they know the damage is not that bad.
"There are some serious losses here, but it's not that extensive," he said.
The fifth named storm of the year, Emily, as of Thursday morning is a Category 2 hurricane located 560 miles southeast of Santo Domingo in the Dominican Republic, according to the National Weather Service (NWS). The storm has been moving west-northwest at 18 mph, packing sustained winds near 100 mph.
The storm is expected to increase in severity over the next couple of days as it moves into warmer waters, the NWS said.
A five-day forecast map shows the eye of the storm passing over the southern tip of Mexico, striking the area of Cancun sometime between Sunday and Monday. However, variations in the model show it could move over Cuba or further south into Belize and Guatemala during that time period.
Professor Mark Saunders at the Tropical Storm Risk at the University of London, part of the Benfield-Greig Group, said there is currently a 5 percent chance Emily could strike the U.S. Gulf coast–which could be somewhere between Brownsville and Corpus Christi, Texas.
Mr. Trice, when asked about Emily, said the staff is preparing for it. While concerned it could hit the U.S., he added that should it hit Cancun "that would be a big one," with a tremendous amount of commercial property, primarily hotels, at risk.
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