While some are counting their lucky stars, others are calculating the damages. Full story.
Lights Out
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After Hurricane Beryl swept along Jamaica on Wednesday night and brought over 12 hours of heavy rain, hundreds of thousands of homes are now left without power.
According to Jamaican energy provider JPS, about 65% of Jamaicans (which make up about 400,000 customers) remain in the dark.
Lost Lives
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Categorized as a category four storm when it hit Jamaica, Beryl has become one of the most destructive to ever hit the country, leaving at least 10 people dead.
Uprooted Trees
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Two of the at least ten victims of the hurricane – the first in St George’s, Grenada and the second in Hanover, Jamaica – died after heavy winds toppled trees onto their homes.
Smaller, Still Dangerous
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But although the hurricane has now been downgraded to category two, it’s still causing panic – especially since it was recorded as tearing toward the popular tourist resort Tulum in Mexico, bringing destructive winds (110mph) and dangerous storm surge.
Get Ready
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According to the National Hurricane Center, the area will be subject to life-threatening winds, up to six feet of storm surge, and up to ten inches of rainfall.
Not a Quiet Weekend
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The Gulf Coast is likely to experience dangerous rip currents over the weekend. And on Monday, the storm is likely to hit southern Texas.
Be Careful
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Mexican President Andrés Manuel López Obrador has projected that the storm may directly hit Tulum, warning tourists and residents to flee to higher ground and/or seek shelter in the homes of family and friends elsewhere.
The president was quoted as saying: “Don’t hesitate, material possessions can be replaced”.
The King’s Concern
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On Thursday, King Charles III, the monarch in several Caribbean nations, said he was “profoundly saddened to learn of the dreadful destruction” left by Hurricane Beryl.
Damage Control
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To assist in the recovery of damage inflicted upon Jamaica, Grenada, and Saint Vincent and the Grenadines, the United Nations has unlocked $4m from its emergency response fund.
Speaking of Funds
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And while record-breaking Hurricane Beryl is causing panic that warming oceans will result in more destructive storms, insurers are bracing themselves for gigantic losses from the Atlantic hurricane season.
Beryl was the first Atlantic hurricane in 2024 that was classified as category five, which is the most severe.
A Surprise Storm
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The region’s hurricane season usually starts in June, peaks in August and September, then runs until November. Beryl, however, arrived early and with a bang, hitting shares of various insurers and reinsurers.
Tough Times
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Stephen Catlin, executive chair at insurer Convex and a veteran of the insurance market, spoke with the Financial Times: “It’s being felt that we are overdue for a bad season”.
He added: “Having an early hurricane of this magnitude suggests that might be the case.”
What’s the Cause?
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Although various factors contribute to the intensity of a hurricane, climate scientists have emphasized the effects of rising sea levels and warming oceans.
Warmer Oceans?
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This comes after the insurance industry was already bracing for a busier hurricane season than in 2023.
In May, the US National Oceanic and Atmospheric Administration said there was an 85% higher chance of an above-average Atlantic hurricane season. Multiple reasons were cited, warmer oceans being one of them.
Not a Pretty Picture
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Chief Science Officer at reinsurance broker Gallagher Re, Steve Bowen, stated it was a “remarkable, concerning, and ominous start” to the Atlantic hurricane season. He added it should be a “massive wake-up call” regarding the outlook for losses.
Global Warming, Anyone?
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Bowen said this is the result of ocean waters that were “as warm in June as they typically should be in September”, which is “proverbial rocket fuel” for storms.
What’s Next?
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Although industry executives have said that any expected financial losses from Hurricane Beryl’s impact on Jamaica ought to be manageable, the storm’s next move remains a mystery.
Massive Damage Ahead
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Analysts at Twelve Capital, the Swiss insurance investment company, noted that “It could continue west into Mexico, or curve into the Gulf and then on to the US”.
One of the costliest storms in US history, Hurricane Harvey from 2017, hit the Caribbean, then moved into the Gulf of Mexico, before landing in Texas.
Too Soon to Tell
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It might be too premature for reliable evaluations of forthcoming insurance claims, but all eyes are currently focused on the Caribbean public-backed risk pools and catastrophe bonds, which is a type of reinsurance where risks are shared with investors.
In The Red?
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Last month, the World Bank renewed its $150m catastrophe bond to cover Jamaica against big storms. If this is triggered, investors might have to face some losses.
Record-Breaking Storms
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Moody’s chief research officer for insurance at risk experts, Robert Muir-Wood, said there was now “every indication this is an intense hurricane season likely to break more records”.
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The post Hurricane Beryl’s Path of Destruction: Too Soon to Predict Insurance Costs first appeared on EcoHugo.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
For transparency, this content was partly developed with AI assistance and carefully curated by an experienced editor to be informative and ensure accuracy.
