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In Retrospect: Hurricane Maria a Year Later

In Retrospect: Hurricane Maria a Year Later

Hurricane Maria was approaching Puerto Rico, the "Island of Enchantment", after leaving its trail of destruction in Dominica and the Virgin Islands, as a major Hurricane at Category 4 on the Saffir Simpson scale with top speeds of 155 mph. At approximately 08:00 on 20th September 2017 the hurricane made landfall, crossing the centre of the island and within a matter of a few hours the extent of damage became apparent. The storm's intensity had caused catastrophic destruction throughout the island.

ADVANTA already had a NATCAT team of loss adjusters in Puerto Rico, who from their hotel rooms in Isla Verde, were reluctantly able to watch the hurricane pass through.

After the storm had passed, our team was able to gain some understanding of the extent of the damage. It became apparent that the island’s vital infrastructure had sustained extensive damage with an island wide failure of the power grid, significant damage to water and communications infrastructure, the sea port and airport. While clearly the initial focus of the local authorities was on emergency work to restore basic infrastructure and reinstate order, it was forgotten that many businesses and homes also suffered widespread damage. 

Initial inspections by ADVANTA’s team on the ground were hampered by a number of factors, including blocked roads, a lack of fuel and a curfew. There was substantial damage to infrastructure rending communication and internet access sporadic and unreliable. However, some early progress with site inspections was possible and thus they were able to begin the adjusting process and supporting local Insurers. Immediately after Maria, the authorities’ priority was to complete evacuations and organise receipt and delivery of emergency supplies. A task that was hampered by the need to provide similar resources to neighbouring islands who also suffered from the effects of the storm. 

As some semblance of order returned, ADVANTA was able to provide additional resources to address the increasing flow of claims from local insurers. However, the continued lack of basic services, limited supply of potable water and the contamination resulting from the natural disaster exponentially increased the challenge our team faced in carrying out their work. 

Having overcome the initial obstacles and as local conditions improved, new challenges arose in adjusting the numerous claims. There was a need to re-adjust the evaluation criteria and the levels of exigency to adapt to the situation. Salvage efforts and loss mitigation were also slower due to the lack of material resources available on the island. Approximately 10 days before Maria, Hurricane Irma had avoided Puerto Rico, but had affected the outlying eastern islands. As a result, materials and resources had been sent to assist these neighbouring islands, leaving a shortage on the mainland. 

Whilst material damage repairs presented their own challenges, the correct indemnity under business interruption claims also provided its own issues. We needed to define criteria to distinguish what was a direct result of material damage caused by Maria and what was a consequence of the external impact of this catastrophe including; deficiencies in water supply, energy and damaged infrastructure of ports, highways and airports. 

Many businesses were affected as a result of the mass migration of individuals to mainland US and the departure of tourists and the closure of many hotels. This decrease in population caused a reduction in the consumer market, lowering the revenues of many local companies. At the same time, many businesses had to incur additional expenses for generators and fuel to remain in business. Those hotels that were able to continue trading, experienced a surge in demand and even overbooking as middle to high-income residents deprived of water and power in their homes sought refuge in local hotels together with those involved in the recovery efforts. 

Throughout the past 12 months we have continued to work on the numerous and complex claims caused by last year’s natural disasters in the Caribbean and demonstrated our commitment supporting the insurance and reinsurance markets in enabling Puerto Rico to resume economic activity and normality as swiftly as possible. 

Andy Cathersides can be contacted at acathersides@advantaglobal.com

Andre Werneck can be contacted at awerneck@advantaglobal.com