Earl visits

Earl earlier today

Right now, Nantucket is forecast to be hit by a Force 2 Hurricane Earl.

First, I clearly hope anyone in the path of Hurricane Earl gets to high ground quickly. I went through Hurricane Andrew, and you don’t want any part of that.

But from an overly clinical insurer perspective, Earl will be, as far as I can recall, the first major test of hurricane models in the Northeast. Boston Globe gives a recent rundown here, and its report points to Hurricane Bob (1991) as the last major storm to rake New England. That was the year before Andrew, the first acid test for the models.

Since then, the technology has come a long way. But cat modeling remains in its infancy, so each new real-time event teaches an important, sometimes painful lesson.

It will also be interesting to see how well insurers and reinsurers managed their Massachusetts exposure. Companies I’m familiar with review this regularly, but in an industry with a lot of players, you can’t be too surprised if someone comes up short.

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