HURRICANES: NORTHEAST

10 Catastrophe risk management DECEMBER 2008 www.cat-risk.com

A repeat of the 1938 New England Hurricane could cause losses as large as Hurricane Katrina in 2005. By Karen Clark

SINCE 1900, NINE HURRICANES HAVE directly impacted the northeast United Statesincluding New York and New England. Most ofthese were relatively weak storms that did notcause a lot of damage. Recent examples areHurricane Gloria in 1985 and Hurricane Bob in1991 – both less than $1 billion events.

The landmark event for this region is theGreat New England Hurricane of 1938. Thisstorm destroyed tens of thousands of buildings,downed 20 million trees, left over 60,000 peoplehomeless and caused over 600 deaths and 4,500injuries. Scientists do not know the exact inten-sity of this storm and maximum sustained windspeeds are estimated at just 120mph (200 kph),but it was not its Saffir-Simpson category thatmade this storm so deadly and destructive.

The 1938 hurricane began as a Cape Verdetropical storm on 10 September. The storm wasforecast to make landfall in south Florida beforeit suddenly changed direction and beganmoving north. By the time it reached CapeHatteras, the hurricane was traveling at over60mph. Long Island, Rhode Island and coastalConnecticut residents had no warning as theywent about their business on what started outas a beautiful, sunny September afternoon.

There was no advanced meteorological tech-nology, such as radar, radio buoys or satelliteimagery at that time. Apparently, Charlie Pierce,a junior forecaster at the US Weather Servicepredicted that the hurricane was heading forthe North East, but the chief forecaster over-ruled him, believing that the storm would dieout when it encountered the colder waters ofthe North Atlantic. By the time the WeatherService learned the storm was headed directlyfor Long Island, it was too late.

Too lateWhen the storm arrived at 3:30 pm, it was hightide, and the tide was even higher than usualbecause of the autumnal equinox. Fifteen to 20foot waves on top of a 16 foot storm surgecreated a 35 foot wall of water that destroyedvirtually everything in its path. Because thestorm track cut through eastern Long Island,the worst of the storm surge was inNarragansett Bay. Downtown Providence,Rhode Island was flooded with 14 feet of water.Coastal destruction from the storm surge wasexperienced from New Haven, Connecticut toNew Bedford, Massachusetts, as well as on LongIsland.

After landfall, the storm continued its fasttrack north and into Canada. The hurricane wasbig, with an eye radius estimated at over 50miles – more than twice the average size ofstorms in the Gulf and southeast regions. It wasover in eight hours, but the entire northeastregion felt the effects of the Great New EnglandHurricane. It caused more damage than the1906 San Francisco earthquake and remainedthe most costly US disaster on record untilHurricane Carol in 1954.

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HURRICANES: NORTHEAST

DECEMBER 2008 Catastrophe risk management 11www.cat-risk.com

Moving quicklyWhile scientists are much better able to predictstorm tracks today, hurricanes can changedirection suddenly and unpredictably. Thechances are that a Northeast hurricane will bemoving at over 40mph – more than twice thespeed of a typical hurricane in other coastalregions. This means the storm will travel fromNorth Carolina to Long Island in less than 10hours. That is very little time, particularlyconsidering that the number of New York resi-dents who live in vulnerable coastal areas and,therefore, would need to evacuate, has beenestimated at up to 2.5 million.

There is also the question of how people willget out. The New York City Office of EmergencyManagement advises residents to use publictransportation to reduce the volume of trafficand roadway congestion. But there could be aproblem with this plan, because of the uniquefeatures of the New York coastline and, inparticular, what is known as the New YorkBight. This is where the New Jersey shore andthe Long Island south shore converge almostperpendicularly to one another. If a hurricanetraveling in a northwest direction made land-fall near New York City, the Bight would funneltremendous storm surge into LowerManhattan as well as across Long Island, block-ing many of the exit routes.

According to an Army Corps of Engineersstudy, even before such a storm made landfall,floodwaters could rapidly fill many subway androadway tunnels. In 1992, a nor’easter thatfollowed this track flooded parts of ConeyIsland, the FDR Drive and the suburban trainPATH station at Hoboken.

The study found that a Category 3 hurricanein New York could generate a storm surge of 24feet at the Battery Tunnel, 21 feet at the LincolnTunnel, 25 feet at JFK Airport, and 16 feet atLaGuardia Airport. Figure 1 shows that even aCategory 2 hurricane could inundate signifi-cant areas of Long Island and New York City,including Manhattan.

The problems caused by this massive inunda-tion would dwarf those caused by HurricaneKatrina in 2005. The storm surge from a major

Northeast hurricane would not only causebillions of dollars of property damage alongthe coast, but is likely to cause multiples of thatdamage in business interruption, infrastruc-ture, clean-up and recovery costs. Few, if any, ofthese impacts are explicitly incorporated intocatastrophe models. Insurers and reinsurerscan only use their own imaginations andscenario testing to estimate what their lossescould be from this type of event.

While the insured wind damages are a biteasier to quantify, there is still a high degree ofuncertainty. Because they tend to be so big andfast moving, Northeast hurricanes travel farinland, causing widespread localised damage.A major Northeast hurricane is likely to affecttens of thousands of square miles and causebetween $15 and $50 billion of insured winddamage.

The range is wide because the insured lossesdepend more on the size of the storm and thestorm track than on the maximum windspeeds. As with the storm surge, the further thetrack is to the west and the closer to New YorkCity, the higher the losses will be, because of the

higher number of properties onthe more powerful right hand sideof the storm.

So Saffir-Simpson categoryalone does not capture thedamage-producing potential ofnortheast hurricanes. We haveintroduced our own tool forquickly assessing the likely insureddamage from tropical cyclones,the KC Wind Damage Scale. Itranges from KC-0, for a storm withwinds of less than 40mph in whichnegligible insured damage islikely, to KC-7, denoting a hurri-cane with winds in excess of160mph.

The KC Wind Damage Scale, shown in Figure2 for a repeat of the 1938 hurricane, providesinsurers with information on the likely damagefootprint.

In a repeat of the 1938 Great New EnglandHurricane, eastern Long Island and portions ofConnecticut and Rhode Island are likely toexperience wind speeds in excess of 100 mph.The KC-4 area (orange swath), will suffer wide-spread structural damage to wood frame, unre-inforced masonry and light metal buildings.Even mid and high rise commercial structureswill suffer significant roof, cladding, signage,window and contents damage. The yellowswath, indicating KC-3 damage levels, extendsall the way into Vermont where there will belocalised areas of roof, window and claddingdamage along with extensive tree damage.

Every New England state except Maine wouldexperience at least KC-2 damage levels. Therewould be extensive power outages throughoutthe region. It would take several weeks forpower to be restored in the hardest hit areas.The insured losses could exceed $30 billion.This same storm with the track shifted 50 milesto the west could cause insured losses exceed-ing $50 billion.

Impacts of climate change?For northeast hurricanes, the biggest risk posedby climate change is sea level rise. The mostrecent report from the IntergovernmentalPanel on Climate Change (IPCC) gives a bestestimate range of sea level rise of four inches to2.9 feet by the year 2100. A study conducted byresearchers from NASA and ColumbiaUniversity projects a sea level rise of 15 to 19inches by the 2050s in New York City.

According to one of the study’s authors:“With sea levels at these higher levels, floodingby major storms would inundate many lowlying neighborhoods and shut down the entiremetropolitan transportation system withmuch greater frequency.” With that level of sealevel rise, a Category 3 hurricane would likelyput most of Lower Manhattan, southernBrooklyn and Queens under water.

The IPCC report does not project an increasein hurricane frequency, but does project thatmaximum wind speeds in hurricanes couldincrease by 2% to 5% over the next 20 years. Even with climate change, it is unlikely therewill be a Category 4 or 5 hurricane in theNortheast, but this does not mean there willnot be a devastating storm. We cannot becomplacent because typical hurricane intensityscales really do not apply in this region. Even alarge Category 2 storm with the right trackcould result in a $50 billion loss.

Karen Clark is president and CEO, Karen Clark &Company.www.karenclarkandco.com

Figure 2 Damage footprint of the Great NewEngland Storm 1938 using the KCWind Damage Scale.

WEBLINKS visit: www.cat-risk.comUS P&C capital cushion could shrink by $80bn

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