Isaac brings massive rains to vulnerable eastern Caribbean

As tropical storm Isaac neared the Lesser Antilles Wednesday afternoon, the US National Hurricane Center (NHC) updated maximum sustained winds for the system at 60mph (97kph), suggesting the cyclone will be mostly a rain-producing event for the islands in the projected path.

With massive hurricane Florence swinging north of the region, the Caribbean looks to have reached the midpoint in the 2018 Atlantic hurricane season without a major impact from a tropical cyclone, roughly a year after hurricanes Irma and Maria reeked havoc across islands like Puerto Rico and Dominica.

As projected ahead in pre-season forecasts, the season has been light, but weeks remain in the peak development period. According to NHC, Isaac continues to remain a threat as it churned westward.

In a report Wednesday afternoon, NHC said Isaac is expected to remain at tropical storm intensity when it moves across the Lesser Antilles on Thursday, and tropical storm warnings are in effect for Martinique, Dominica, and Guadeloupe.

Tropical storm watches are in effect for Montserrat, St. Kitts and Nevis, Antigua, and Saba and St. Eustatius.

"Life-threatening flash flooding is possible with Isaac. The storm is expected to produce total rainfall accumulations of 2 to 4 inches with isolated amounts up 8 inches across Martinique, Dominica and Guadeloupe. Rainfall amounts of 1 to 2 inches with isolated amounts to 4 inches are expected across Puerto Rico and the southern United States Virgin Islands," said NHC.

Ahead of the season, in June, insurance-focused rating agency A.M. Best issued a report called Caribbean Insurers Well-Capitalized Despite 2017 Hurricane Losses, which noted, "despite the magnitude of the 2017 catastrophe losses, rated P&C insurers were well-capitalized and able to withstand the record-setting impact of the hurricanes."

The report, however, stressed the economic divisions at play in the subregion, adding, "The 2017 hurricanes highlighted the lack of insurance penetration in the Caribbean, since the disparity between economic and insured losses was much wider than that seen in North America. The storms also underscored the region's acute economic exposure to climate change and the need to build resilience structurally and financially."

With much of the population still facing hardships related to hurricane Maria, Dominica is particularly vulnerable to any significant weather event.

Lennox Linton, leader of Dominica's opposition United Workers Party, said Tuesday, "We encourage fellow citizens who are living under tents or whose houses are still covered by tarpaulins or whose houses suffered structural damage during Maria that remains unresolved to seek more reliable shelter," as reported by local news outlet Dominica News Online.

Insurers took a hit

Though well capitalized, insurers' profits were nearly wiped out by the 2017 season.

A.M. Best-rated P&C insurers saw consolidated net income decline 99.7% year-over-year, primarily due to the losses associated with hurricanes Irma and Maria. The combined ratio deteriorated by 11.8 points to 106.6%. Consolidated gross premiums increased 1.8%, while net premiums decreased by approximately 1%.

The rating agency added that the reinsurance industry's capital position helped Caribbean insurers renew their reinsurance contracts in 2018 with price increases that were consistent with loss experience, adding that some loss-affected areas in the Caribbean have seen reinsurance rate increases of as much as 50%, while pricing in non-affected areas has increased by around 10%.

"A.M. Best believes the reinsurance partnerships in the Caribbean region are essential, and that the 2017 catastrophes demonstrated that the region's rated insurers must rely on reinsurers to remain viable," said the agency in the June report.

Pictured: A man walks amid destruction on a street in Roseau on the Caribbean island of Dominica following passage of hurricane Maria.