Gallagher Re warns of significant losses from Hurricane Helene in Florida

Gallagher Re has issued an advisory on Hurricane Helene, which is rapidly intensifying as it moves into the eastern Gulf of Mexico.

According to the National Hurricane Center (NHC), there is growing consensus that Helene will make landfall as a Category 3 or Category 4 hurricane in Florida’s Panhandle or Big Bend regions today.

The storm is expected to be large, with hurricane and tropical storm-force winds extending far from its center. Due to its fast forward speed, hurricane winds are projected to reach as far inland as Georgia.

The NHC is forecasting peak storm surge inundation up to 15 feet in some areas, with up to eight feet of surge possible in the Tampa Bay region. Helene’s remnants are also expected to bring heavy rainfall further inland.

Helene projected losses and potential impact

Preliminary estimates from Gallagher Re suggest that a landfall in the Big Bend or Panhandle region as a major hurricane could result in insured losses in the range of $3 billion to $6 billion. These estimates are based on historical data for storms of similar intensity.

However, Helene is not a typical storm due to its large wind radius, which is expected to bring hurricane-force gusts and significant storm surge to the densely populated Tampa Bay area, as well as tropical storm-force winds across most of the Florida peninsula, Georgia, the Carolinas, Tennessee, and southern Appalachia.

If the storm shifts further east toward Tampa, Gallagher Re warns that insured losses could exceed $10 billion, though this scenario is currently considered unlikely. In this case, flood-related damage, particularly storm surge, could result in significant additional costs in the Tampa area.

The National Flood Insurance Program (NFIP) and the USDA’s crop insurance program may face additional losses nearing $1 billion.

Helene is expected to be the fourth hurricane to make landfall in the US in 2024. Earlier storms include Beryl (Category 1; Texas), Debby (Category 1; Florida), and Francine (Category 2; Louisiana). Despite earlier projections of a quieter hurricane season, the Atlantic has seen an above-average number of US hurricane landfalls.

However, losses for the private insurance market have remained manageable, with combined losses from the previous three storms totaling around $6 billion.

Gallagher Re said that it will continue to monitor Hurricane Helene’s development as it approaches landfall, providing updates on potential losses and impacts.

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