Hurricane Irma (2017)
The Category 5 hurricane that wrecked Saint Martin and Saint Barthélemy on September 6, 2017 before hitting Florida: the hardest test the French CatNat scheme has faced overseas.
Hurricane Irma was the Category 5 storm that struck Barbuda, Saint Martin and Saint Barthélemy on September 6, 2017, before making landfall in the Florida Keys on September 10. Sustained winds were close to 290 km/h (about 180 mph) as it crossed the northern islands. On Saint Martin, almost every building was damaged. On the French side, the Caisse centrale de réassurance (CCR) and insurers put the insured loss at close to 2 billion euros, unheard of for a natural catastrophe in France's overseas territories. The CatNat (natural catastrophe) scheme applied, with a twist. In mainland France, wind falls under the storm cover written in the policy; overseas, cyclonic winds enter the scheme above a threshold, 145 km/h sustained over ten minutes or 215 km/h in gusts. An interministerial order declared the natural catastrophe a few days after the storm. CCR, the state-guaranteed public reinsurer, took its share through quota share and stop-loss. The insured figure understates the disaster. A large share of homes on Saint Martin had no homeowners cover, for lack of clear title or by choice, and rebuilding relied partly on public money. In Florida, Irma became a textbook case of loss creep: assignment of benefits, where policyholders hand their claim rights to repair contractors, plus the litigation that followed, pushed estimates up for years. Irma came between Harvey and Maria, three major hurricanes in under a month, and Caribbean reinsurers renewed on January 1, 2018 right after paying for all three.
Textbook case, made-up figures: a hotel on Saint Martin suffers 5 million euros of wind damage and 1 million of storm surge. If the readings used for the area exceed the regulatory threshold, both items go through the CatNat scheme, partly reinsured by CCR. If they stay below, the 5 million of wind falls back on the policy's storm cover, with its own deductible and the insurer's private reinsurance; only the surge stays in CatNat. For the private reinsurer, the same night is worth 0 or 5 million depending on one anemometer.
Irma, Hurricane Irma, Irma 2017, Irma Saint Martin
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