What a difference a day (or two) makes. Having seen the devastation that Gustav wreaked on Cuba (and Haiti), I watched the forecastors’ projections on Sunday morning with a sense of foreboding and déjà vu. Almost three years to the day after the devastation of Katrina, Gustav was set to traverse the Gulf of Mexico, Cat 4 all the way, en route to New Orleans. With reparation of New Orleans levees not scheduled for completion until 2011, Mayor Nagin ordered a mandatory evacuation starting in the early hours of Sunday morning.

Thankfully, unlike Katrina, Gustav’s structure was too disorganised to take the opportunity to intensify as it passed over the warm Loop Current, and further weakened as it approached landfall as a Cat 2 hurricane. Today, as reports come in, almost all the news has been positive:

• New Orleans’ levees just about coped with the tidal surge – overtopping but not failing
• Coast Guard flyovers showed that all platforms in the Gulf are in place and that energy infrastructure suffered no significant damage (here)
• Sabine has partially lifted ‘force majeure’ at Henry Hub, a major natural gas interconnection point, which allows companies to depart from contract terms in the event of a natural disaster
• The Louisiana Offshore Oil Port (LOOP) said it is optimistic it can restart operations “fairly quickly”
• Based on post-landfall data catastrophe modelling firms have lower (and narrower) ranges of estimates for onshore damage and insured losses. AIR are estimating $2bn to $4.5bn, while EQECAT and RMS both settle on $3bn to $7bn.

If these estimates are borne out by actual claim experience (once damages have been fully assessed) Gustav will be very much a business-as-usual hurricane rather than the mega-catastrophe it nearly was.

Detailed maps of Gustav’s windfield are available to all Lloyd’s managing agents – contact the Exposure Management team.

Lloyd’s policyholders affected by the hurricane should read more in the policyholder advice section of lloyds.com.

Tags: Energy, Gulf of Mexico, Gustav, Henry Hub, Hurricanes, LOOP, New Orleans

This entry was posted by Paul Nunn on Wednesday, September 3rd, 2008 at 7:48 am and is filed under Exposure Management.