LONDON, Feb 3 (Reuters) - One of the world’s most powerful cyclones which battered Australia’s northeast coast on Thursday is expected to cost insurers around AUS $3.5 billion, according to Forecasting service Tropical Storm Risk (TSR).
Cyclone Yasi, roughly the size of Italy, was rated a maximum-strength category five storm, and drew comparison with Hurricane Katrina, which wrecked New Orleans in 2005, killing 1,500 people and causing $81 billion in damage.
Cyclone Yasi will be the second most damaging Australian cyclone on record after cyclone Tracy which struck Darwin in 1974, TSR told Reuters on Thursday.
“Based on Yasi’s immediate post-event windfield and TSR’s high resolution loss model we are looking at a total insured damage bill of about AUS $3.5 billion,” said Professor Mark Saunders, TSR’s director.
Yasi made landfall near to Mission Beach in northeast Queensland at around 14:00 GMT on Feb.2 with peak 3-sec gusts of about 170 mph. Yasi is the most powerful cyclone to strike the east coast of Australia since 1918, said the forecaster.
The immediate post-event peak gust windfield for Yasi as modeled by TSR is shown here. This shows that peak gusts of at least 100 mph affected a coastal extent of 100 miles stretching from just south of Cairns to Ingham. Gusts exceeding 100mph also extended over 100 miles inland.
Australians voiced relief and surprise after one of the world’s most powerful cyclones spared the nations northeast coast from the expected devastation - which missed the heavily populated areas.
“Fortunately the major cities of Cairns and Townsville were largely spared significant damage; otherwise the insured loss from Yasi may have rivalled that from cyclone Tracy,” Saunders said.
Cyclone Yasi reached a CHI value of 11.72 by landfall, according to Thomson Reuters data.
CHI is a more accurate measure of the destructive power of a storm than the Saffir Simpson scale since it takes into account both size and windspeed. CHI at landfall is also used as the reference for a family of Hurricane Options traded on the CME, which can be used to hedge against hurricane exposure.
By comparison, Hurricane Katrina had a CHI value of 22.4 when it made landfall in the Gulf of Mexico.
For more details on CHI values and a CHI calculator, see the Thomson Reuters Insurance Linked Securities Community, or email email@example.com