News

Hurricane Laura

Posted 28.08.2020 – News

Hurricane Laura made landfall on the small coastal town of Cameron, Louisiana at 7am on Thursday with sustained maximum windspeeds approaching 150mph.

Major assets which have sustained significant damage include the Lake Charles Regional Airport and a chlorine manufacturing facility.

Whilst this region of Louisiana is relatively sparsely populated, it lies near to a large number of onshore energy refineries. These include those of Port Arthur, located 35 miles east of Cameron and containing the largest oil refinery plant in North America, although early reports suggest it has escaped major damage.

The path of the storm passed over a number of offshore oil and gas facilities in the Gulf of Mexico during the 48 hours prior to landfall, albeit with lower winds speeds. Though there is little information so far as to what physical damage has been incurred, safety protocols prompted the evacuation of a reported 300 production platforms and a 85% shutdown of oil production in the region. It is worth noting, however, that potential loss of earnings will be lessened by low oil prices.

Whilst reliable insured loss estimates are difficult to come by at this early stage, a range of between $5bn and $15bn has been mooted in the industry press. Which end of this scale the final bill lies will much depend on the extent of damage to the offshore rigs and the level of flooding brought about storm surges and heavy rain.

In either case, the loss will be far less than would have in the case had the eye of storm passed nearer to Houston (125 miles east) or New Orleans (200 miles west). Hurricane Laura therefore stands to represent a mid-sized catastrophe loss to the insurance market when set against hurricanes Harvey, Irma and Maria of 2017, which cost approximately $30bn each.

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