Florence still threat despite downgrade

Hurricane Florence has been downgraded to a Category 2 storm as it approaches the US coast but is still being treated as a threat to life and property. Residents are exposed to catastrophic flash flooding in addition to river flooding in parts of the Carolinas. Hurricane Florence was forecast to make landfall as a Category 2 storm in the Carolinas and Virginia on Thursday and early Friday morning, according to the National Hurricane Center. Florence may now be heading further south, and Georgia is the latest state to declare an emergency. It joins North and South Carolina, Virginia, Maryland and Washington DC. Florence will bring storm surge and high tide that expose the coasts to rising waters and flooding which will move inlands effecting 758,000 homes according to estimates by Corelogic. Rainfall could dump up to 30 inches (75cm) in the Carolinas, according to risk modeller AIR. Water is expected to reach 13 feet (four metres) above ground in parts of North Carolina. Authorities told more than one million residents to evacuate the area - shutting schools and factories. Insurers could face the brunt of this storm as they face losses of $2bn, according to news agency Reuters. Data from SNL Financial revealed that Liberty Mutual Insurance and Nationwide Mutual Insurance Company dominate property insurance coverage in the Carolinas. Despite the devastating effects of hurricanes and their dent on the industry’s resources, senior officials applaud the way insurers are coping with these natural disasters. Speaking to Reactions earlier this week at the Rendez-Vous de Septembre in Monte Carlo, Swiss Re CEO Christian Mumenthaler said: “the industry coped extremely well doing what we’re supposed to do which is pay claims”. Referring to the trio of hurricanes Harvey, Irma and Maria (HIM) last year, he added: “It was extremely smooth – everything was paid and there were no defaults. It’s important to remember that the system really works – the purpose of reinsurance works.” While the industry proved its value by paying out on claims, Mumenthaler, like many of his industry colleagues, is frustrated by the significant gap that once again arose between insured losses and economic losses. “The economic loss is estimated at $337bn and only 33% of that was covered by insurance and reinsurance – more than half of it wasn’t covered, and that’s always something that’s a bit painful to see,” Mumenthaler stated.

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