Hurricane Katrina made its second US landfall on August 29th in southern Plaquemines parish, Louisiana, about 70 miles south-southeast of New Orleans. The storm subsequently swept across Mississippi, Alabama and western Florida. Katrina was a category 4 storm at landfall with sustained winds of 140 miles per hour. The storm weakened slightly on its approach to land and was downgraded from category 5 to category 4.
The insurance industry faces as much as $25 billion in claims from Katrina, according to preliminary assessments. AIR Worldwide Corporation said that insured losses could total $12 billion to $26 billion. Eqecat said damage could range from $9 billion to $16 billion while Risk Management Solutions (RMS) estimated an insured loss at between $10 billion to $25 billion. The Insurance Information Institute (III), meanwhile, predicts the insurance industry payout could range from $12 billion to $25 billion.
The storm killed at least 57 people along the Gulf of Mexico coast and caused severe and widespread damage, according to reports. Katrina cut power to 1.3 million homes and businesses in Louisiana, Mississippi, Alabama and Florida and authorities said it could be two months before electricity is completely restored. In Mississippi, streets and homes were flooded as far as 6 miles inland. Governor Haley Barbour declared a state of emergency and described Katrina's aftermath as “catastrophic.” BBC News said the Mississippi towns of Biloxi and Gulfport were badly hit by Katrina as winds of 135 miles per hour pounded the state's coast.
Several beachfront casinos in Mississippi were flooded, reports said. A 22-foot storm surge was recorded in Bay St. Louis. Emergency officials said fifty people were killed in Harrison County (including 30 people at a beach-side apartment complex in Biloxi) while four other deaths were reported in the counties of Warren, Leake, Pearl River and Hinds. There have been three confirmed fatalities in New Orleans.
Hundreds of thousands of people fled New Orleans before Katrina came ashore. Although the city, which sits around 6 feet below sea level, was spared a direct hit, severe flooding occurred after a levee holding back the waters of Lake Pontchartrain was breached. New Orleans Mayor Ray Nagin said 80% of the city is underwater. He added the water is 20 feet deep in some parts. Around 9,000 people who were unable to evacuate the city spent the night at the Superdome arena. Winds of up to 100 miles per hour were recorded in New Orleans which damaged the Superdome and several other buildings, according to reports. Elsewhere in Louisiana, around 40,000 homes were flooded in St. Bernard just east of New Orleans.
In Alabama, Governor Bob Riley declared a state of emergency as the storm hit the state's coast with huge waves and powerful winds. Flooding was reported on Dauphin Island and sections of Mobile were inundated after the storm pushed water from Mobile Bay into the town, reports said. All residents living in coastal and low-lying areas in southern areas of Mobile County and flood-prone areas of Baldwin County were told to evacuate their homes. Katrina's outer bands also spawned tornadoes throughout the US south-east. The Federal Emergency Management Agency (FEMA) said it is preparing to house tens of thousands of people for several months while the American Red Cross announced it is launching the largest relief operation in its history.
Katrina also caused damage to offshore oil rigs after crossing the Gulf of Mexico as a category 5 storm. More than 700 offshore platforms and rigs were evacuated. Reports said at least two drilling rigs were adrift in the Gulf and another in Mobile Bay broke free of its mooring and lodged under a bridge. On Monday, the price of oil surged to a record of $70.80 amid concerns that Katrina would cause significant disruption to operations. Reports said Katrina has already halted production of around 630,000 barrels of crude a day, around 12 percent of daily output. Analysts warned the figure could rise significantly once damage assessments are complete.
Earlier, Katrina made landfall between Hallandale Beach and North Miami Beach in Miami-Dade County on August 25th. Winds of up to 80 miles per hour were recorded at landfall. Eleven people were killed and 1.3 million customers were left without power in Miami-Dade County, Broward County and Palm Beach County. Two men were killed in Broward by falling trees, police said. The storm's slow forward speed also caused serious flooding in the region while seas were estimated at 15 feet. Around 15 inches of rain was recorded in parts of Miami-Dade County. AIR Worldwide estimates insured losses from Katrina's first landfall could approach $600 million while RMS said insurance companies could pay between $1 billion to $2 billion.
Sources: National Hurricane Center, Associated Press, CNN News, BBC News, Agence France
Presse, Reuters News, Charleston Gazette, The Palm Beach Post
This report was reprinted with expressed written permission. For more CAT-i reports and further information on the service, please click http://www.guycarp.com.
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