(Bloomberg) — Hurricane Laura raked Louisiana early Thursday (August 27), becoming one of the most powerful storms ever to hit the state, with a storm surge, flash floods, and devastating winds that could inflict more than $15 billion in insured losses. The storm had fallen to Category 1 by 10 a.m. local time, with top winds of 75 mph. The system's landfall comes 15 years after Hurricane Katrina hit the region on August 29, 2005. Laura came ashore at 1 a.m. local time near Cameron, Louisiana, with maximum winds of 150 miles (241 kilometers) per hour, matching a record set in 1856. Local officials said flooding was less than expected, while wind inflicted most of the damage. It killed at least one: a 14-year-old Louisiana girl who died when a tree fell on her home, according to Governor John Bel Edwards. On the current forecast track, it will move across the state on Thursday, weakening as it goes, and arrive in Arkansas by nightfall, said the National Hurricane Center (NHC). Laura extends an extremely active Atlantic hurricane season that still has three months to go. It will be the seventh system to hit the U.S., a record for this time of year, and the first major hurricane to hit the Gulf Coast since Michael in 2018. The storm has prompted mandatory evacuations in coastal areas and is targeting the heart of America's energy industry, shutting more than 80% of Gulf oil production and a third of the region's refining capacity. It scored a direct hit on plants that produce chemicals and liquefied natural gas. Laura had more power than Hurricane Harvey had when it made landfall in Texas in 2017.

Damage is heavy in Louisiana, Governor says

Louisiana Governor John Bel Edwards called Laura's damage "extensive," because the wind speed was "as promised," even though the storm surge "appears to have been about half as what was forecasted." Inland areas suffered mostly structural damage from the wind, Edwards said on CNN. "It looks like we got an assist there," Edwards said of the lower-than-predicted surge, which forecasters Wednesday had called "unsurvivable." Throughout the storm-hit region, more than 510,000 homes and businesses were without power as of 7:15 am local time, mostly in Louisiana, according to utility websites. "Power outages are going to become more extensive," Edwards said.

Laura's costs will fall most heavily on Louisiana

Hurricane Laura is expected to cost insurance companies as much as $15 billion, with 80% of those losses coming from Louisiana and 20% from Texas, according to Wells Fargo & Co. analysts. The losses could be a blow to reinsurers, which provide insurance for insurers, serving as backstops while earning premiums that they invest elsewhere. "It is tough to tell how much exposure the reinsurers will have, as higher Louisiana losses will likely lead to more losses for reinsurers and a more Texas-focused event would result in more losses being retained by primary insurance companies," analysts led by Elyse Greenspan said in the note to clients Thursday. That's because the insurance market in Texas is dominated by national carriers such as State Farm and Travelers, while many smaller, regional companies serve Louisiana, the analysts said. Hurricane Laura's path closely resembled that of Ike in 2008, the Wells Fargo analysts said. That storm, which also made landfall near the border between Louisiana and Texas, inflicted wind damage in the Houston area, leading to insured losses of $12.5 billion, or $15 billion in today's dollars.

Coronavirus keeps the adjusters at a distance

Hurricane victims can usually count on one thing: a swarm of insurance adjusters. But the coronavirus pandemic is hindering their appearance. State Farm readied hundreds of claim specialists in Dallas and Birmingham, Alabama, this week. They're usually briefed and equipped in conference rooms, but this week, the company used drive-through tents instead. State Farm expects to deploy video conferencing apps to handle vehicle inspections, though the company said it may also use drones. For homeowners, it may have to do in-person inspections, and workers will wear personal protective equipment and practice social distancing. "As daylight arrives and conditions become safe for customers to look over their property for damage, we're ready," Chris Pilcic, a spokesman, said in an email.

Texas refinery lets off pollutants

In a rush to batten down ahead of Laura's arrival, the biggest oil refinery on the continent sprang a leak and spewed unidentified hydrocarbons into the air to maintain control, according to a regulatory filing. The facility in Port Arthur, Texas, owned by Saudi Aramco's Motiva Enterprises, also had to deploy booms to prevent any spills from spreading into nearby waterways, the company said in a filing with the Texas Commission on Environmental Quality. — With assistance from Brian K. Sullivan, Sheela Tobben, Jeffrey Bair, Lucia Kassai, Brian Eckhouse, Paul Stinson, Gregory Calderone, Isis Almeida, Michael Bellusci, Glen Carey, Naureen S. Malik, Jennifer A. Dlouhy, Kevin Crowley, Ari Natter, Joe Carroll, Rachel Adams-Heard, Aaron Clark, Jenny Surane and Will Wade. Related:

• How COVID-19 will impact the 2020 hurricane season
• Hurricane Isaias insured losses estimated to top $4.2B in U.S. and Caribbean
• Hurricane Hanna tears through Texas, leveling Corpus Christi marina

 

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