20 Sep

On 19th September 1985, a magnitude 8.0 earthquake struck Mexico. The epicentre was 220 miles from Mexico City but nonetheless caused around 5,000 (confirmed) deaths; including missing or never recovered people, this figure raises to between 30,000 – 45,000. The Mexico earthquake along with its two major aftershocks caused around US$9.2bn in economic damage and US$0.9bn in insured losses (adjusted for inflation to 2017 values).

Yesterday, on the 32nd anniversary, two hours after an earthquake evacuation drill had been completed, a magnitude 7.1 quake struck 75 miles southeast of Mexico City (population 12.3 million) and just 34 miles south-southwest of the city of Puebla (population 1.6 million).

Mexico Earthquake – Preliminary reports & Insurance update

Preliminary reports suggest at least 240 people have been killed in the Mexico earthquake but with many collapsed buildings, that figure is expected to rise. There have not been any firm estimates for the cost of the damage but the USGS has suggested a 54% chance of economic damage over US$1bn.  Insurance penetration of Mexico remains quite low, around 10-20% across all lines. According to the alternative risk transfer-dedicated news service Artemis (http://www.artemis.bm/), the earthquake was not of sufficient magnitude to trouble the IBRD / FONDEN 2017 catastrophe bond which was triggered by the 8th September Mexico earthquake (magnitude 8.1).  The cat bond is triggered by the magnitude, not the total damage or loss of life. AIR Worldwide have estimated the 8th Sept earthquake will result in an insurance industry loss of between US$0.8bn – US$1.1bn.

 

Mexico Earthquake Map

 Modified Mercalli Intensity Scale

 

Hurricane Maria

Over the course of 24 hours starting early on 17th Sept, Maria explosively intensified from a category 1 to a category 5 hurricane. Only an hour after reaching category 5 status, Maria made landfall on Dominica. The intense winds in excess of 160 mph have flattened much of the island. Initial estimates to the level of destruction on the island directly compare to Hurricane David in 1979.

Hurricane David was a category 5 hurricane that made a near pass of the island but intense winds, heavy rain and massive mudslides destroyed or damaged 80% of residences and devastated the agricultural industry. Total economic damages were never accurately calculated but approximately 20% of the Island’s population emigrated soon after the storm as they had virtually nothing left.

The Caribbean Disaster Emergency Management Agency (CDEMA) has stated the cost to Dominica and its 72,000 inhabitants is likely to be “billions of dollars”.

Passing over Dominica caused Hurricane Maria to weaken to a category 4 but the warmer than average waters north of the island helped re-intensify the hurricane to category 5. Its central pressure has dropped to 908 millibars making it more intense than Hurricane Irma.

Maria has brought torrential rain and strong gusts to Martinique, Guadeloupe, Montserrat, Saba, and St. Kitts and Nevis but the relatively small radius of Maria’s eye (25miles) spared those islands from the more intense winds. Maria made direct landfall on Puerto Rico at 7:30am AST (12:30pm BST) on the southeast corner. Puerto Rico’s largest city, San Juan is situated on the northeast side of the island so may escape a direct hit from the eyewall, devastating winds and rainfall are still forecast.

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