Look Out For Hurricane Sammy!
Posted by Sam Friedman, NU Editor in Chief in Uncategorized
The National Weather Service finally got around to naming a storm system after me–Hurricane Sam, which would be the 18th such event of 2009. Let’s hope we don’t get that far down the list this year, because if we do, that means we’re having a terrible catastrophe season, huge insured losses and the end of the soft market–at least for property risks.
The weather service predicts a “near-normal” hurricane season, citing a 70 percent chance there will be at least nine named storms.
If they are wrong, however, and we get past Ana, Bill, Claudette, Danny, Erika, Fred, Grace, Henri, Ida, Joaquin, Kate, Larry, Mindy, Nicholas, Odette, Peter and Rose to get to Sam, we’re all in big trouble. (We’d be in an even deeper fix if we go beyond Hurricane Sammy to Teresa, Victor and Wanda!)
In commenting on the property and casualty insurance industry’s first-quarter results earlier this week, Insurance Information Institute President Bob Hartwig cited lower cat losses as one of the few bright spots in an otherwise grim report–down $600 million (or 17 percent) from a year ago to $2.9 billion. He noted that the second quarter has been relatively quiet as well for disaster losses.
However, David Sampson, president of the Property Casualty Insurers Association of America, warned against “a genuine risk of complacency that could have disastrous consequences.”
Mr. Sampson is absolutely right in his calls for everyone to start preparing NOW for a potentially catastrophic storm.
“The hurricane season has just started,” he pointed out, while reminding everyone that “it just takes one storm” like Hurricane Andrew, Ike or Katrina to “disrupt millions of lives and cause tens of billions of dollars in damages.”
He threw down the gauntlet, declaring that “now is the time for all of us–insurers, regulators, legislators, businesses and consumers–to take the steps that need to be taken to make sure we’ll be prepared when the next big storm hits.”
While Mr. Sampson’s logic should be self-evident and compelling, it amazes me how quickly we all fall back into old, bad habits when it comes to risk management, loss control and mitigation.
Lawmakers in particular have notoriously short memories. Just look at the mess in Florida in terms of cobbling together an effective cat insurance system, and the failure of Congress to address the need for a national cat fund of some sort.
In any case, as “cool” as it might be to have a monster storm named after me, I’ll be glad if Hurricane Sam never takes shape, and if it does, that it steers clear of the U.S. shoreline.
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Sam: Just in jest…I couldn’t resist!
National Weather Service Bulletin: Hurricane Sam Aims for Florida Coast 1000 EDST
After a brief encounter with the US Virgin Islands, and the Dominican Republic, Hurricane Sam seemed to be blowing off steam before taking a swipe at Cuba, and heading toward the tourist rich havens of the Florida Keys. The rather thick fluffy cloud layer that has grown atop Sam has made penetration by Hurricane Hunter aircraft difficult, but they will make another attempt late today.
While a minimal hurricane, Sam has puffed himself up occasionally, striking fear into the coastal residents, and particularly into the hearts of property-casualty underwriters and agents, as they scurried to cover themselves with additional layers of insurance and re-insurance as well as sheets of plywood and other storm supplies. At this juncture, according to my insurance sources, it’s too late as Sam approaches. In the words of the wise insurance guru:”What you got, you got” (Or was that Uncle Guido?)
The next bulletin will be at 0200 hours following penetration into Sam’s eye by Hurricane Hunter aircraft… OUCH!
Hurricane Sam Update 0200 EDST
Hurricane Hunter aircraft have downgraded Sam’s winds to tropical storm strength, and Sam does not appear to be turning into a monster at this point. While occasionally blustery and windy, and sometimes referred to as “all wet” by others, Sam has veered off the point and his fury dissipated, having run into a wall of hot air generated by the political upheaval in Washington, which has funneled at an odd angle down down the East Coast.