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Bermuda absorbs direct hit from Gonzalo

Bermuda and its (re)insurance hub seem to have emerged relatively unscathed from Hurricane Gonzalo despite sustaining a direct hit from the Category 3 storm over the weekend.

Gonzalo was the strongest storm to hit the island since Fabian in 2003, which triggered around $300mn in insured damages at the time - equivalent to around $650mn today - according to AIR Worldwide.

While AIR did not provide a loss estimate for Gonzalo, the modelling agency said that observed wind speeds from the storm were a bit lower than those seen during Hurricane Fabian.

Scott Stransky, manager and principal scientist at AIR, said it was likely the passing of Tropical Storm Fay a week prior had reduced sea surface temperatures around Bermuda, which meant Gonzalo was slightly weaker than it might have been.

"When the eye began to come onshore, the storm was still Category 3 with 115 mph winds, but by the time the very centre passed overhead, Gonzalo had weakened to Category 2, with 110 mph winds," added Stansky.

The cat modelling firm noted that buildings in Bermuda are designed to withstand sustained wind speeds of up to 110 mph and gusts of up to 150mph.

The strongest observed winds at Bermuda's airport were clocked at 93 mph, with gusts of up to 113 mph.

As a result, reports of structural damage have been "relatively scarce", according to AIR.

Nevertheless, Gonzalo's 17 October landfall was a reminder to underwriters of the potential for major storms to strike late the North Atlantic hurricane season, which has been relatively benign so far this year.

Hurricane Wilma struck Florida on 27 October 2005 and two years ago Sandy made its landfall in New Jersey on 29 October, devastating parts of the US Northeast. Sandy and Wilma rank as the third and fifth most costly insured property losses from hurricanes in US history, respectively.

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