Northern hurricanes rare, but quicker than Gulf storms

The northeastern seaboard of North America is highly vulnerable to “northern hurricanes,” a rare form of storm that occurs much quicker than its Gulf of Mexico cousins, reported A.M. Best.These storms tend to be two to three times faster than hurricanes that hit the Gulf of Mexico, leading to less evacuation time and tend to occur later in the season, Nicholas Coch, a researcher at the University of New York, told the World Insurance Forum.A Category 4 hurricane hitting land just north of Atlantic City, pummelling ocean-front vacation homes and casinos, and then moving northward into New York state and eastern Canada is among the US$100 billion loss scenarios noted in A.M. Best’s “2006 Annual Hurricane Study,” said BestWire.”As many as 40 insurers could be vulnerable to failure if a hurricane caused US$100 billion or more in insured property losses in the United States,” cited BestWire.Northern hurricanes tend to occur once every 90 years, making one statistically likely by the 2020s, it added. The warning comes as Marsh launches a parametric insurance product, WindX-Si, to address financial exposures that businesses face due to hurricane-force winds. WindX-Si provides indemnification for economic losses arising from a scenario in which a named storm generates winds exceeding a specified velocity within a defined vicinity of a business location, a Marsh release says.The product provides US$25 million of aggregate coverage from the lead insurer. Additional limits might be available using other markets, the release adds.