CoreLogic, a property information and analytics provider, has released its 2024 Hurricane Risk Report to assist insurers and risk managers in preparing for the upcoming Atlantic hurricane season.
The report indicates that over 32.7 mn homes from Texas to Maine are at risk of moderate to severe damage from hurricane-force winds, with a total reconstruction cost estimated at $10.8 trln.
However, it is important to understand that not all affected homes will be completely destroyed by a hurricane (see North Atlantic & Western North Pacific Hurricane Season’s Impact for Re/Insurers).
Hurricanes, with their immense power and devastating potential, are among the most destructive natural disasters. The impact of a single storm can ripple through communities, causing billions of dollars in damage and affecting millions of lives.
Hurricanes are among the most destructive natural catastrophes. A single storm can cause billions of dollars of damage and impact millions of people.
Quantifying hurricane risk is essential for understanding the potential impact of these events and developing effective risk mitigation and transfer strategies, as preparation and planning are fundamental to ensuring safety and solvency across the insurance, real estate, banking and emergency management industries.
Accurate assessment of hurricane risk is vital for industries such as insurance, real estate, banking, and emergency management.
These assessments guide crucial decisions on pricing, loss reserves, and exposure to catastrophic risk, ensuring stability and preparedness in the face of such events (see 2023 U.S. Insured Losses from Hurricanes Have Risen over the 15 Years).
Insurance remains one of the most important tools for a resilient society, given the role it plays in recovery. Being able to quantify risk helps insurance companies make informed risk decisions, which is critical in the evolving hurricane landscape
Maiclaire Bolton Smith, CoreLogic’s Vice President, Hazard and Risk Management
With the possibility of an active hurricane season, both insurers and homeowners should take all necessary steps to prepare and mitigate risk.
While national trends provide valuable insights, the impact of hurricanes is most pronounced in individual communities. The report focuses on three major metropolitan areas: New York, Houston, and Miami (see TOP 20 Costliest U.S. Hurricanes).
These densely populated areas need to prioritize planning due to the potential severity of direct hurricane landfall.
In the New York metro area, over 3.7 mn residential properties are at risk. Both Houston and Miami each face risks to more than 2 mn homes.
The high population density and extensive infrastructure in these regions could lead to significant disruptions if hurricane damage occurs.
The National Oceanic and Atmospheric Administration (NOAA) anticipates a return to La Niña conditions in the Pacific Ocean, reducing vertical wind shear in the North Atlantic. Additionally, North Atlantic Ocean sea surface temperatures are already warmer than any previous year on record.
These conditions point towards another potentially significant hurricane season, underscoring the need for continued vigilance and preparedness.
Hurricane Risk Report offers a comprehensive analysis of hurricane risk in the U.S., providing essential insights for property owners, insurers, and policymakers.
Underestimating the impact of natural catastrophes can lead to a dangerous financial imbalance where insurance payouts surpass collected premiums. This discrepancy can create an unstable situation for insurers and other stakeholders.
Therefore, it is crucial to annually update hurricane risk assessments to reflect changes in environmental conditions and shifts in exposure.
In the 2024 Hurricane Risk Report, CoreLogic identified that across the U.S. Gulf Coast and East Coast:
- Over 32.7 million residential properties, with a total reconstruction cost value of $10.8 trillion, are at moderate or greater risk of hurricane wind damage.
- Approximately 7.7 million properties, with a reconstruction cost value of $2.3 trillion, are at risk of storm surge flooding.
By understanding and mitigating hurricane risks, stakeholders can better prepare for, respond to, and recover from these catastrophic events.
CoreLogic remains committed to offering data and tools to help navigate the complexities of hurricane risk, ensuring that communities and industries are equipped to weather the storm.
