Hurricane Helene landfall at Cat 4 140mph winds, Tampa Bay sees historic surge flooding

Hurricane Helene continued to intensify right up to landfall on the Big Bend coastal region of Florida, hitting the coast with sustained wind speeds of 140 mph and higher gusts, while storm surge flooding has now reached the highest levels in more than 80 years in the Tampa Bay area.

Hurricane Helene was always going to be a very large storm and as we’ve been explaining for days its reach and impacts would be widely felt, while the exact location and track it follows would be critical in defining the industry loss for insurance, reinsurance and insurance-linked securities (ILS) markets.

The wide-reaching impacts being felt in Florida and the southeastern United States are not just outwards, due to the very large size of major hurricane Helene, but also inland as Helene is now rapidly moving into Georgia at this time and still has a relatively well-defined eye, with prospects of 100 mph wind gusts far inland from the Big Bend of Florida.

Hurricane Helene came ashore at around 11.20pm Eastern time, with sustained winds of 140 mph and a minimum central pressure of 938 mb, making it the lowest pressure for a Florida hurricane landfall since 2018’s Michael.

However, on a wind speed basis, Helene was the strongest to hit the Big Bend region since 1851, which is notable.

Hurricane Helene is now the fourth US Gulf Coast landfalling hurricane of the 2024 season and records show only five other years since records began have seen that number strike the Gulf Coast.

Hurricane Helene intensified very rapidly, going from a Category 1 hurricane to Category 4 in less than twelve hours yesterday. Had the storm been able to organise earlier and not been slightly hindered by dry-air entrainment when it first entered the Gulf of Mexico, the top-end intensity could have been higher still and Helene might have made it to Cat 5, it seems.

The US has now experienced eight Category 4 or 5 hurricane landfalls in the last eight years, seven being continental, which is as many as struck the US in the previous 57 years.

Given the timing of a landfall at night, little in the way of damage reports are available for the landfall area, where a storm surge of up to 20 feet was expected and most people living in the sparsely populated region will have evacuated in advance.

But reports are coming out from more built-up areas of a wide-reaching storm surge event, with Tampa a particular focus, as ever.

Tampa Bay area water gauges are said to have reached and surpassed record levels in almost every case at this time. The surge is now starting to go down, but the area has experienced its highest storm surge event in over 80 years, reports suggest, with levels of near to the forecasted 8 feet.

In addition, Clearwater is said to have experienced around 6 feet of storm surge, breaking the record there by around 2 feet and areas such as Cedar Key and St Petes have also experienced relatively significant inundations from Helene. The coastal impacts have extended far from the landfall site, as anticipated with such a large hurricane.

As ever, it is very challenging to know how costly storm surge events such as this will be for the insurance and reinsurance industry, with flood still not as widely included in policies in the US as in other countries of the world. But surge does tend to drive more of the industry loss than pluvial flooding, so this surge event could be a driver of a higher industry loss quantum than had perhaps originally been expected.

It’s worth noting that, in terms of pluvial flooding, rainfall totals of up to 10 inches are expected widely along the path of Helene as it travels inland, with storm totals as high as 20 inches anticipated, which will drive significant flooding as well.

In the insurance-linked securities (ILS) market, storm surge flooding is typically covered in US named storm focused catastrophe bonds, but it’s far too early to tell whether the costs of the surge related to hurricane Helene would drive sufficient indemnity losses for any cat bonds to become exposed.

It’s worth mentioning the NFIP catastrophe bonds under the FloodSmart Re program here, as those are clearly storm surge event exposed. However, while this is a wide-spread storm surge event it has not seen the high-levels of water inundation experienced with other recent hurricanes, such as Ian. But we’d still consider the FloodSmart Re cat bonds to deserve watching until greater clarity over the storm surge extents and possible costs emerge over the coming days, at which time they may well prove to be safe from any loss, given the levels of NFIP flood insurance policy claims required to trigger them.

From the industry loss point of view, forecasts and modelled loss scenarios continued to point to mid-single digit billions, some to high-single digit, as hurricane Helene neared shore, we understand.

Andrew Siffert of BMS said late yesterday, “Right now, insurance losses should end up below $8B, with a likely range between $4 -$5.5B,” which aligns with reinsurance broker Gallagher Re’s early estimate of up to $6 billion.

However, it’s not clear how well those modelled loss forecasts for the storm will have captured the wide-spread surge event that unfolded, or the inland impacts expected from having what is effectively still a hurricane entering states beyond Florida. But still, a single digit billion dollar private and public insurance market loss seems the market’s best guess for Helene, at this time. As data and insights emerge through today, we may begin to see some early estimates announced.

As a result, while the Big Bend area landfall impact remained the scenario and the worst-case of a landfall further east hasn’t occurred, there is still a little uncertainty in how high the eventual insurance and reinsurance market loss becomes, given the wide-spread surge and inland impact potential of hurricane Helene.

That said, the likelihood remains that primary insurers will retain the majority of hurricane Helene’s losses, with reinsurance capital picking up a relatively smaller proportion of the overall loss and in most cases catastrophe bonds and ILS arrangements are likely to remain safe from direct losses from the storm, although there is, as ever, some chance of aggregate deductible erosion, quota share claims leakage, and a little uncertainty over some of the more surge exposed names in the market, uncertainty that should get cleared up later today as daylight emerges and the scope of damage from Helene becomes clearer.

Finally, at 2am Eastern time, some two hours or more after landfall, hurricane Helene is still estimated to have 90 mph sustained winds as it passes Valdosta in Georgia, showing just how far inland claims may emerge for this storm.