EQECAT Narrows Range Of Estimated Onshore Insured Losses From Hurricane Ike Based Upon Reconnaissance-Team Reports, Review Of Storm's Characteristics
Also Estimates Total Economic Loss To Gulf Of Mexico Offshore
Facilities
OAKLAND, Calif.--(Business Wire)--
EQECAT, Inc., the leading authority on extreme-risk modeling,
Friday afternoon (Eastern Time) said, based upon reconnaissance-team
reports of damage caused by Hurricane Ike, and additional
post-landfall data regarding the storm's characteristics, it has
narrowed its estimated onshore insured losses to a range of $8 billion
to $12 billion, from an initial estimated range of $8 billion to $18
billion at the storm's landfall.
In addition, EQECAT said, based on its Gulf of Mexico Offshore
Energy Model (OEM), total economic loss to offshore oil and gas
facilities from Hurricane Ike is estimated to be in the range of $4
billion to $6 billion, with property damage making up about $1.5
billion to $2 billion, and lost production accounting for about $2.5
billion to $4 billion. Total offshore insured losses are likely to be
only a small portion of total economic offshore losses.
Offshore property damage estimates include removal of debris and
extra clean-up expense in a range of $250 million to $400 million.
As of September 18, 2008, the United States Minerals Management
Service reported that 49 producing platforms and 3 jack-up drilling
rigs were destroyed by Hurricane Ike. Several other platforms and
drilling rigs sustained moderate damage, EQECAT said.
Very Few Serious Structural Failures Identified In Downtown
Houston
"Hurricane Ike was observed to take a more easterly track than
originally forecast, placing downtown Houston on the leeward side of
the storm," said David Smith , senior vice president of EQECAT.
"Observations by members of the ABSG Consulting Inc.
reconnaissance-team in the downtown Houston area identified very few
serious structural failures. There was widespread incidence of
low-level damage, an occurrence consistent with winds of a Category 2
storm."
"Furthermore, regional power outages appear to have been driven
largely from the failure of the lower-voltage distribution lines," he
said. "Lower voltage lines are closer to the ground and more
susceptible to damage from debris. Power outages have been widespread
and will contribute to business interruptions in this area," he said.
EQECAT said storm-surge related damage appears to be confined to
the coastal areas and is not as great as initially anticipated by the
National Oceanic and Atmospheric Administration (NOAA). Low lying
areas like the NASA Johnson Space Center do not appear to have
suffered extensive damage.
"While Galveston suffered significant damage, the total surge and
wave height were far less than originally forecast, and buildings
elevated above the total surge height generally were not severely
damaged," Mr. Smith said.
Beyond wind damage to commercial and residential fixed structures,
such as office buildings, factories , warehouses, and homes, EQECAT's
insured loss estimates include business interruption, as a result of
the destruction of property; and demand surge, which occurs when the
demand for products and services to repair damage significantly
exceeds the regional supply. Thus, these products and services may
have to be brought to the region quickly from distant points,
resulting in additional costs for transportation, packaging and
manufacture.
Excluded from EQECAT's insured loss estimates are losses related
to flooding, private and commercial automobiles and similar vehicles.
Offshore Energy Estimates Based Upon EQECAT's Offshore Energy
Model
EQECAT's estimates of the impact on offshore energy were developed
through its Gulf of Mexico Offshore Energy Model (OEM). This model
helps oil and gas producers, insurers and reinsurers to manage
hurricane risk for offshore assets. Currently, the model covers
exposures in the U.S. Gulf of Mexico. The EQECAT OEM was launched in
May 2007 and is based on rigorous science, engineering research, and
robust mathematical methodologies.
ABSG Consulting Is A Leading Global Provider of Risk Management
Services
ABSG Consulting Inc. (ABS Consulting) is a leading independent
global provider of risk management services, combining industry
specialists, risk modeling and practical engineering and technology
solutions to help business, finance, industry and government manage
risk. Through a comprehensive and integrated risk management approach,
ABS Consulting is committed to helping clients reduce business
interruption and manage catastrophic, operational, and security risks.
ABS Consulting is headquartered in Houston, Texas. For additional
information, please visit www.absconsulting.com
EQECAT Software Enables Clients Worldwide To Assess, Manage Wide
Range Of Risks
EQECAT and its parent ABSG Consulting Inc. (ABS Consulting) serve
the global property and casualty insurance industry, major
multinational corporations and financial institutions. EQECAT is known
as the technical leader and innovator in the development of analysis
tools and consulting services to quantify exposure to natural and
man-made catastrophic risk.
Through its extreme-risk modeling software platform,
WORLDCATenterprise(TM), EQECAT enables clients to assess and manage
potential damage and loss from wind, earthquake, flood, wildfire, and
terrorism, among other perils. WORLDCATenterprise(TM) includes 177
natural hazard software models for 89 countries spanning six
continents.
EQECAT was founded in 1994 and is headquartered in Oakland,
California. For additional information, please visit
www.absconsulting.com and www.EQECAT.com.
The Samansky Group
Eric R. Samansky, 516-319-0858
eric@samanskygroup.com
Copyright Business Wire 2008
