RMS Estimates Dean Losses around $1.5 Billion

Newark, Calif.-based Risk Management Solutions announced that it estimates losses from Hurricane Dean are likely to range between $750 million and $1.5 billion. RMS’ preliminary indications show around $300 million from damage to the Mexican coast, “with most of the remainder resulting from the storm’s destruction in Jamaica.”

Although Dean was a powerful category five hurricane when it came ashore on the Yucatan Peninsula (See IJ web site Aug. 21), RMS noted that it “struck the south-eastern Yucatan Peninsular coast in a relatively sparsely populated area approximately 40 miles northeast of Chetumal. Had the storm tracked 150 miles north it would have
impacted the bustling tourist cities of Cancun and Cozumel, tripling the insured loss in Mexico.”

“Dean has taken an extraordinarily fortunate track, slipping between St. Lucia and Martinique and striking a scarcely populated area of the Mexican coast,” commented Dr. Claire Souch, RMS’ senior director of model management. “Given its intensity, the Caribbean and Windward Islands have faired relatively well. Though Jamaica has taken a large hit, the track for a category 5 storm could hardly have been better planned to minimize the damage.”

She added: “Dean’s impact in Mexico will be similar to Hurricane Emily’s in 2005, which was a category 4 storm and caused around $250 million of insured loss. If Dean had made landfall in the north of the Yucatan Peninsular coast, we could have been looking at a near repeat of Hurricane Wilma, which devastated the area and resulted in insured losses of some $1.8 billion.”

RMS indicated that it’s unlikely that Dean will affect the U.S. RMS will continue to monitor the situation and will update its estimate of insured losses as its analysis the storm to decay rapidly to a tropical storm.

Source: RMS – www.rms.com