Update on Hurricane Francine and the California wildfires

After three weeks of relative calm in the North Atlantic, Hurricane Francine, the 6th named storm of the 2024 North Atlantic hurricane season, made landfall in southern Louisiana on Wednesday, 11^th September, as a category 2 hurricane. ​ It caused heavy rain, storm surge, and intense winds in Louisiana and Mississippi, including New Orleans, and also affected northeast Mexico and southern Texas. ​

It was reported that over 450,000 people in Louisiana and 70,000 people across Mississippi and Alabama lost power, and 500 were moved to emergency shelters.

Francine developed from a cluster of storms tracked by the National Hurricane Center on Sunday, 8th September, over the southwest Gulf of Mexico. ​ By early Monday, it became Tropical Storm Francine. ​ The storm marginally intensified due to environmental dry air and moved northward, brushing past northeast Mexico and southern Texas.

By late Tuesday, Francine reached hurricane strength and turned northeast toward southern Louisiana. ​ It peaked at category 2 strength on Wednesday, 11^th September, with winds of 100 mph and made landfall over Terrebonne Parish. ​ After landfall, Francine merged with a frontal system and became a post-tropical low by early Thursday. ​

The remnants of Francine are expected to cause further rainfall and potential flooding in the southeastern U.S. in the coming days as well as a low threat of tornados from Tennessee into Alabama as well as parts of Georgia.

Total insured losses are currently expected to be $2-3bn. ​

In addition to Hurricane Francine, three separate wildfires burn in California. The Bridge, Line and Airport Fires are currently burning east of Los Angeles. AON reports that over 44,000 hectares of forest are currently on fire. Across the three fires, over 50 homes and structures have been destroyed but fortunately there have been no reports of fatalities. Reuters reported yesterday that there has been damage to lifts in the Mountain High ski resort. ​AON estimates that the total economic and insured losses may reach into the hundreds of millions of dollars.

Alpha comment

Initial reports indicate that Hurricane Francine losses are expected to be up to $3bn. A loss of this size will mainly be borne by direct insurance market rather than the reinsurance market. Lloyd’s is likely to have some minimal exposure on a coverholder basis, but the majority of losses are expected to be with the local US insurance market.

So far there seems to limited property damage caused by the ongoing wildfires and therefore the insurance losses are expected to be small. California has seen an increased focus on wildfire in recent years with many US national insurers such as State Farm reducing their capacity in the state which has allowed underwriters at Lloyd’s to improve their underlying coverholder business portfolios from the region.

Picture: The Line Fire, California, 9th September 2024; Source: NASA